How Customer Relationship Management Practices Enhance Competitiveness within Five-Star Hotels? The Mediating Effect of Customer Loyalty

Document Type : Original Article

Authors

1 Hotel Studies Department, Faculty of Tourism and Hotels, Fayoum University, Fayoum, Egypt

2 Hotel Studies Department, Faculty of Tourism and Hotels, Luxor University, Luxor, Egypt

3 Hotel Studies Department, Higher Institute for Tourism and Hotels - Luxor (E.G.O.T.H), Luxor, Egypt

Abstract

This paper investigates the effect of customer relationship management (CRM) practices on hotel competitiveness, emphasizing the mediating role of customer loyalty. This field study took a random sample of 284 department managers at five-star hotels in Luxor and Aswan, where the percentage of questionnaires amounted to about 71% of the total questionnaires distributed. Their responses were analyzed using SmartPLS v.4. Findings confirmed that knowledge management had the most significant impact on customer loyalty compared to the other dimensions. Additionally, customer loyalty was identified as a significant partial mediator in the relationship between CRM practices and hotel competitiveness. Results underline the need for hotels to focus on knowledge management, as it plays a vital role in hotels' long-term relationship with their customers and ability to compete effectively. By findings, this paper suggests that hotel management should employ recruitment and advancement of knowledge-sharing systems, up gradation of personalized services, and digital solutions to improve customer loyalty. Hence, this will help the hospitality industry gain sustainable competitiveness. The most important recommendations were to use customer relationship management systems based on modern technologies to enhance customer engagement and to leverage digital marketing strategies to engage guests more effectively and to improve customer loyalty to brands through online interactions.

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