Customer Retention and Loyalty at Roda Al Murooj Hotel

Introduction

The prosperity of a business relies on vivid thinking on the essential conceptual issues. In the case of customer retention is a key focus, then the main question would be what strategies an organization would implement to increase customer retention? On the other hand, if customer loyalty is the key focus, then the main question would be what strategies an organization would implement to increase customer retention? These two questions will guide this case study as an attempt to develop various strategies that Roda Al Murooj Hotel would need to apply to increase customer retention and loyalty. This is a five-star hotel located across from Dubai Mall and the well-known Burj Khalifa. It has a lush garden with a vast swimming pool and free Wi-Fi in public spaces. It takes only ten minutes’ drive from the Dubai World Trade Centre to reach the Roda Al Murooj Hotel (Booking.com, 2020). Throughout this case study, customer retention and loyalty will be seen as the critical success factor of the Roda Al Murooj Hotel.

Understanding the concept of customer retention and loyalty

Ability to retaining customers in highly competitive business environments is critical for any company that would like to remain relevant in the market since losing a customer represents more than the loss of the next sale (Alshurideh, 2016). Different scholars have proposed a different definition of customer retentions. According to Oliver (1997), customer retention refers to the ability to have customers who are deeply engaged to buy a preferred good or service frequently in the future, despite situational influences and marketing efforts having the potential to cause switching behaviour. Ranaweera and Prabhu (2003) defined customer retention as the future propensity of the customers to stay with their service provider. Motiwala (2008) defined customer retention as the ability of a company to maintain the existing customer base by establishing good relations with all who buy the company’s product. All these definitions will bring the concept of having a customer who can make frequent purchases from a specific company.

The concept of customer retention cannot be discussed in isolation without mentioning the idea of customer loyalty.  According to Wu and Ai (2016), organizations should have loyal customers as an alternative to gaining competitive advantage in the market facing stiff competition from rivals. Just like customer retention, they are universally agreed on definition of customer loyalty. Uncles, Dowling, and

Hammond (2002) define customer loyalty as something that consumers may exhibit to brands, services, stores, product categories (e.g., cigarettes), and activities (e.g., swimming). According to Rai and Medha (2013), customer loyalty has been perceived to be a behavioral concept characterized by frequent purchases of product or service measured as the series or share of purchases, referrals, the magnitude of relationship or integration of all of the above.

The term customer retention and customer loyalty might be confusing to mean the same thing. However, they have a clear distinction. Loyal customers conduct themselves in a way that produces positive outcomes for themselves and the business. On the other hand, retention is commonly thought of as the process of keeping a customer (Bradley, 2019). Loyalty programs are one element of retention efforts that aim to not only keep customers but also increase their value.

On the contrary, the goal of retention is to keep customers who are not a good fit; for example, they have a high cost to serve; they only buy on special. In this case, organizations may waste money on customers who will leave as soon as a competitor presents a better offer (Bradley, 2019). Despite the differences between customer retention and customer loyalty, organization integrating loyalty programs with other retention campaigns stand a chance to gain completive advantages than its rivals.

According to Bradley (2019), combining loyalty programs with other retention campaigns, assures organizations that customers will keep revisiting their businesses. Moreover, organization integrating loyalty programs with other retention campaigns enables an organization build everlasting relationships with the right customers: those who will provide the most significant returns, versus those with a high cost to serve (Bradley, 2019). Therefore, it is more cost-effective for an organization to adopt the concepts of loyalty and retention as a way of ensuring that customers are so elated with present goods and service offerings, and thus remain loyal and make frequent purchases (Bradley, 2019). Therefore, organizations will gain more competitive advantages when combining loyalty programs and other retention strategies.

One of the competitive advantages an organization will enjoy by integrating loyalty programs with other retention strategies is increased repurchasing behaviour. The more positive the relationship between the customer and the company is, the more often he buys products from this company, which has a positive influence on the turnover (Gruber, n.d). Moreover, retained customers are known to be less sensitive to price changes. A customer who is loyal to a company is more likely to accept a price increase than a customer without loyalty (Gruber, n.d). Also, customers who are satisfied with the service of a company are likely to advertise positive word-of-mouth recommendation, thus attracting more new customers (Gruber, n.d). After understanding the concept of customer retention and loyalty, it would be essential to discuss various strategies of increasing customer retention and loyalty at Roda Al Murooj Hotel.

Strategies to increase customer retention and loyalty

This section will develop different strategies that Roda Al Murooj Hotel would need to implement to expand its customer retention and loyalty. This is considered as a business strategy which focuses on enhancing the competitive position of the Roda Al Murooj Hotel’s services within the hospitality industry that it serves. According to Wheelen and Hunger (2012), business strategy entails either fighting against all competitors for advantage or working with one or more companies to gain an advantage against other competitors or both. Therefore, the need to develop possible business strategies that will enable the Roda Al Murooj Hotel to gain a competitive advantage over its rivals such as Burj Al Arab Jumeirah, Marco Polo Hotel, African Hotel, among others. The TOWS Matrix will be used to illustrate how the external opportunities and threats facing the Roda Al Murooj Hotel can be matched with its internal strengths and weaknesses to result in four sets of possible strategic alternatives for increasing customer retention and loyalty.

Threats for the Roda Al Murooj Hotel

• Stiff competition from nearby hotels such as Shangri-La Hotel, Dubai (0.5 miles away), Gevora Hotel (0.7 miles away), Rove Downtown (0.1 miles away), Address Sky View (0.5 miles away), Address Dubai Mall (0.2 miles away), among others (TripAdvisor, 2020 a).
• A value-added tax (VAT) rate of 5% introduced by the GCC states (Faz, 2017).
• Tawajed clause prohibits unmarried couples from sharing one room in Dubai hotels (Property Finder, 2019).
• Public displays of affection are not well-tolerated in Dubai (Dray, 2020).

Opportunities for the Roda Al Murooj Hotel

• Proximity to the Dubai World Trade Centre (10-minute drive away). Most travellers interested in luxury brand shopping, entertainment and restaurants prefer Trade Centre to suburbs (Booking.com, 2020). Exhibition 1 shows customer reviews about the location of Roda Al Murooj Hotel.
• Nearby attraction sites such as the famous Burj Khalifa, Downtown Dubai, the Dubai Mall, Souk Al Bahar, Creekside Park (4 miles northeast), Dubai International Convention Centre (1.86 miles northeast), Emirates Mall (4.34 miles east), Satwa (2 miles northwest), Creekside Park (4 miles northeast), Sheikh Saeed Al Maktoum House, and the Shindagha Museum (4.50 miles north), among others (Northstar Travel Media, 2020; and RODA Al Murooj, 2020).
• Nearby recreations sites for snorkeling, snow skiing, water skiing, scuba diving, among others (Northstar Travel Media, 2020).
• Nearby venues such as Address Boulevard and Dusit Thani Dubai (Northstar Travel Media, 2020).
• Nearby airports such as Dubai (6.50 miles northeast), Sharjah (17.25 miles northeast), and Al Maktoum Intl (22 miles southwest).
• Expo 2020 to be held at Dubai in the United Arab Emirates, opening on October 20, 2020.

Weaknesses of the Roda Al Murooj Hotel

• Restrictions during major exhibitions
• Noisy room, especially those located next to the Pub. Exhibition 2 shows a customer review complaining about the noisy environment (TripAdvisor, 2020 b).
• The old room which is smelly and the bathroom is having moulds (TripAdvisor, 2020 b). Exhibit 3 shows a customer review complaining about the state of the room at Roda Al Murooj Hotel.
• An anti-theft alarm is making noise to the customers (TripAdvisor, 2020 b). Exhibit 4 shows a customer review complaining about the noise from the anti-theft alarm.
• Beds with bedbugs (TripAdvisor, 2020 b). Exhibit 5 shows a customer review complaining about bed bugs.

Strengths of the Roda Al Murooj Hotel

• The hotel’s dining options include the award-winning Double Decker Pub and Pergolas the all-day- dining restaurant serving international dishes as well as Circle & Ojos Café. 24-hour in-room dining is also available (TripAdvisor, 2020 b). See exhibitions 14-16.
• Flow health club and wellness centre have a fully equipped gym, sauna, and a hot tub. Massage treatments can be booked at a surcharge. The complex also benefits from an on-site beauty salon, babysitting services, steam room and tennis courts (TripAdvisor, 2020 b).
• The luxurious accommodations offer views of the city or the lush courtyard gardens. Each one feature flat-screen TV, a sitting area and a working desk, minibar and tea/coffee facilities. The bathroom includes a hairdryer and complimentary toiletries (TripAdvisor, 2020 b). See exhibitions 6-13.
• The hotel offers a variety of discounts: group discount, corporate discount, government/ military discount, travel agents 35.0%, and airline personnel 50.0% (TripAdvisor, 2020 a).
• The hotel has a wide range of on-site recreation activities such as health club, health spa/massage, hot tub, jogging trails, pool (children’s pool, three outdoor pools), and tennis (indoor tennis, outdoor tennis) (TripAdvisor, 2020 a). See exhibition 17-19.
• Different security services are available including electronic key/lock, parking area well lit, the smoke alarm in rooms, sprinkler in rooms, uniformed security, valet parking service, and surveillance cameras on site (TripAdvisor, 2020 a).
• Excellent staff.

The TOWS Matrix of Roda Al Murooj Hotel

Conclusion

The TOWS Matrix was used to develop possible strategies that would help the Roda Al Murooj Hotel increase its customer retention and loyalty. The benefits of enhancing customer retention and loyalty include Increase the customer’s repurchasing behaviour, having a loyal customer who can accept price changes, and enjoying the customer’s positive word of mouth recommendations. In conclusion, customer retention and loyalty is the critical success factor of the Roda Al Murooj Hotel.

References

Alshurideh, M. T. (2016). Is customer retention beneficial for customers: A conceptual background? Journal of Research in Marketing, 5(3), 382-389. Retrieved from http://www.jormonline.com/index.php/jorm/article/view/126/pdf_29

Booking.com. (2020). Roda Al Murooj Hotel. Retrieved from https://www.booking.com/hotel/ae/roda-al-murooj-hotel.en-gb.html?aid=356980;label=gog235jc-1BCAMoAjifA0gzWANodogBAZgBCbgBF8gBDNgBAegBAYgCAagCA7gC2r7F8gXAAgE;sid=4982ad32b0cf174f26396e80752e959e

Bradley, B. (2019). The key difference between loyalty and retention. Customer Relationship Management Institute LLC. Retrieved from https://www.crmirewards.com/article/the-key-difference-between-loyalty-and-retention

Dray, T. (2020). Rules for Unmarried Couples Staying in Dubai Hotels. Retrieved from https://traveltips.usatoday.com/rules-unmarried-couples-staying-dubai-hotels-61972.html

Faz, M. (2017). The impact of the newly added VAT on the UAE hospitality sector. Retrieved from https://www.hospitalitynet.org/opinion/4085000.html

Gruber, B. (n.d). Why customer retention? Do I really need it? Retrieved from http://www.scibis.eu/images/whyCR.pdf

Motiwala, A. (2008). The Dictionary of Marketing. Lulu.com. Available online at: http://books.google.co.uk/books?id=a4sauw6OYtcC.

Northstar Travel Media. (2020). Roda Al Murooj Hotel Dubai – Dubai, United Arab Emirates. Retrieved from https://www.northstarmeetingsgroup.com/Meeting-Event-Venues/Dubai/Convention-Hotel/Roda-Al-Murooj-Hotel-Dubai-p52579528

Oliver, R.L. (1997). Satisfaction. A behavioral perspective on the consumer. New York

Property Finder. (2019). Cohabitation: What does the law say? Retrieved from https://www.propertyfinder.ae/blog/cohabitation-what-does-the-law-say/

Rai, A.K., Medha, S. (2013). The Antecedents of Customer Loyalty: An Empirical Investigation in Life Insurance Context. Journal of Competitiveness, 5(2), 139-163. doi: 10.7441/joc.2013.02.10.

Ranaweera, C. and J. Prabhu (2003). “The influence of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting.” International Journal of Service Industry Management, 14(4): pp: 374-395.

RODA Al Murooj. (2020). what is on. Retrieved from http://www.roda-hotels.com/al-murooj/location/local-area/

TripAdvisor. (2020 b). Roda Al Murooj reviews. Retrieved from https://www.tripadvisor.co.uk/Hotel_Review-g295424-d572764-Reviews-Roda_Al_Murooj-Dubai_Emirate_of_Dubai.html

TripAdvisor. (2020). Hotels near Roda Al Murooj. Retrieved from https://www.tripadvisor.com/HotelsNear-g295424-d572764-Roda_Al_Murooj-Dubai_Emirate_of_Dubai.html

Uncles, M.D., Dowling, G.R., Hammond, K. (2002). Customer Loyalty and Customer Loyalty Programs. Journal of Consumer Marketing, 20(4), 294-316. doi: 10.1108/07363760310483676

Wheelen, T. L., & Hunger, J. D. (2012). Strategic management and business policy: Toward global sustainability (13th Edition). Dubai: Pearson.

Wu, H.C. & Ai, C. H. (2016). Synthesizing the effects of experiential quality, excitement, equity, experiential satisfaction on experiential loyalty for the golf industry: The case of Hainan Island. Journal of Hospitality and Tourism Management, 29, 41-59. doi.org/10.1016/j.jhtm.2016.05.005.

Exhibitions

Exhibition 1: Customer reviews about the location of Roda Al Murooj Hotel

Exhibition 2: Customer complaining about sleeping in a noisy room

Exhibition 3: Customer complaining about the state of the rooms

Exhibition 4: Customer complaining about anti-theft alarm making noise

Exhibition 5: Customer complaining about bedbugs

Exhibition 6

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Exhibition 10

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Exhibition 19