1

CHAPTER 1

THE PROBLEM AND ITS SCOPE

INTRODUCTION

Rationale

Customer loyalty is a highly valuable asset in the hotel industry, and in

order to gain the loyalty of current customers, loyalty programs must be

implemented. Loyalty programs are intended to encourage customers to use

the products and services offered by some organizations while also retaining

sales relationships with loyal customers. A loyalty program in the hospitality

industry seeks to strike a balance between what the guests want and what is

being offered to them as a reward. It is an essential tool for chain hotels to

foster customer loyalty by providing a combination of hard benefits generating

an elimination of direct financial costs (e.g., complimentary stay) and soft

benefits reflecting customers’ sense of special status (e.g., late check-out) to

customers who frequently make purchases (Yi and Jeon, 2003).

With COVID-19 pandemic, many industries including hospitality

industry are affected. The hospitality industry faces a lot of unprecedented

challenges as many hotels are currently empty, underutilized, and some have

been forced to stop its operation. This resulted to some negative impacts like

low hotel revenues and low guest rates. And as the world turns to a new

normal, the challenge on how the hospitality industry can cope and recover

from those impacts remains difficult.

 2

With this, the researchers are motivated to conduct a study that aims to

determine if awareness on hotel and resort’s loyalty programs among guests

in Panglao, Bohol can lead to persuade them in using and availing such

loyalty programs. The findings of this study will determine whether the level of

awareness of the hotels’ loyalty programs among Panglao, Bohol residents

affects its ability to persuade the residents to use and avail of such programs

and help the researchers, and the hospitality industry organizations, find a

better plan that will help them recover and sustain in this new normal and be

ready for unexpected challenges in the future.

Literature Background

On March 11, 2020, the World Health Organization (WHO) declared a

global pandemic as a consequence of the COVID-19 outbreak, which has led

to an unprecedented situation across the planet that not even the two World

Wars created. This global pandemic has affected all sectors and countries,

and also the lives of all citizens. International travelers were among those

primarily affected in the early stages of the outbreak of the novel coronavirus

infection, and since tourism is one of the largest growing industries globally, it

is ironically expected to play a significant role in the socio-economic recovery

after the COVID-19 pandemic. The COVID-19 pandemic has caused

unexpected, abrupt changes to the hospitality industry, highlighting specific

workforce vulnerabilities. The impact of technology adoption, shrinking labor

pools, and workplace risks are likely to be accelerated by the COVID-19

 3

crisis. Current projections suggest that 24% of COVID-induced layoffs may be

permanent (Barrero et al., 2020).

COVID-19 has disrupted the labor market, and workers with lower

preparation positions and lower income levels are disproportionately affected.

Business closures and capacity control have taken an unintended toll on the

hospitality labor market. Many entry-level jobs eliminated during the pandemic

may not return, accelerating the pace of predicted shifts in the hospitality

industry. Increased automation, a further shrinking of the labor pool, the rapid

exit of the aging workforce, and increased stigmas toward hospitality

employment as temporary work are all likely outcomes of mass

unemployment (Bowen & Morosan, 2018; Society of Human Resources

Management, 2015; New American Economy, 2020). Historically, the

hospitality industry has been aware of impending challenges in its workforce

but is often slow to adopt or make significant changes to meet or rise above

these barriers (Mejia, 2018).

In March 2020, Fernandes (2020) also described various different

potential scenarios with GDP losses ranging from 3% to 6%, to 10% or more

than 15%, depending on the country, and McKibbin & Fernando (2020)

estimated the total loss of GDP for 24 industrial nations under seven different

scenarios, depending on the severity of the pandemic, as between $283

billion and $9.2 trillion.

Accordingly, the most recent information available from an analysis by

the Asian Development Bank on 96 economies affected by outbreaks with

more than 4 million cases of COVID-19, predicts that the global economy
 4

could suffer losses of between $5.8 trillion and $8.8 trillion, equivalent to 6.4–

9.7% of global GDP (Park et al., 2020). This report includes possible changes

to tourism, consumption, investment, commercial and production links,

transmission channels, and supply interruptions that negatively affect

production and investment, as well as the effects that would result from the

responses of different governments to mitigate the global economic impact of

COVID-19.

Many hotels, restaurants, and bars have laid off thousands of workers

permanently or temporarily, and some hotels and Airbnb hosts offered

medical workers free accommodation. Some hotels are also being turned into

temporary hospitals (Niestadt, 2020a, 2020b). In Germany, since March 2020,

hotel occupancy has decreased by more than 36% compared to the previous

year (Fairmas GmbH, 2020), and in Spain, the tourism industry continues to

feel the impact of the pandemic, with a fall of 71.7% in visitor numbers in the

first semester of 2020 compared to the same period in 2019. However, some

preliminary findings suggest that customers will not immediately return as

soon as hotels reopen (Gursoy et al., 2020). Some authors believe that a

recovery to pre-COVID-19 levels could take until 2023 or later (Krishnan et al.,

2020).

In the previous years, there were always problems that threatened the

Philippine hospitality and tourism industry: the failed assassination of Pope

John Paul II in 1995; terrorism; and the controversial issue of the

government's extra-judicial killings, which until now remained an issue. Taking

these into account, the Department of Tourism announced through Business

World Online on January 8, 2020 that it has a target of 9.2 million international
 5

visitors and travelers for the year 2020, which is mostly steered by more

airport developments. Unfortunately, a disease caused by a severe acute

respiratory syndrome coronavirus (SARS-CoV-2), named COVID-19, which is

also related to the coronavirus outbreak of 2003, might unexpectedly change

the perspective.

According to the 2019 estimate of the International Monetary Fund’s

statistics, the Philippine economy is the 36th largest economy by nominal

GDP. The hospitality and tourism industries have made a very big contribution

to the Philippine economy from the past years up until the present. According

to the Philippine Statistics Authority, "As measured by the share of tourism

direct gross value added (TDGVA) to the Gross Domestic Product (GDP), the

contribution of tourism industries to the Philippine economy was estimated at

12.7 percent in 2018," making it the highest contribution so far. The

contribution of Hospitality and Tourism Industry from 7.9% in 2012, 8.2% in

2013, 9.0% in 2014, 10.1% in 2015, 10.7% in 2016, 12.2% in 2017 and 12.7%

increases in 2018. The tourism industry is among the eight largest

contributors to the Philippine economy (Ardemer, 2020).

The effects of the pandemic crisis are asymmetrical, impacting some

member states much more than others (Ladi et al., 2020). European Union

countries have developed different governmental initiatives in parallel with

those adopted by the EU, following a multilevel governance approach. Once

the EU decided to focus its strategy for the tourism sector on three specific

priority groups, namely tourists, companies, and destinations or countries, and

created a financial structure to support the policies designed to assist them,

the member countries developed national policies that covered such lines of
 6

support. Then, the member states adopted the Next Generation EU plan in

order to develop national programs to help their tourism sectors weather the

effects of the COVID-19 pandemic, specially tailored in accordance with the

size of their country’s service sector.

In a reviewed study, EU decisions related to the pandemic and

considered the advantages and disadvantages of both centralized and

decentralized decision-making processes. Some authors (Aubrecht et al.,

2020) recommend a "smart combination" of both, given the mutual

dependence between subnational authorities and central governments

(OECD, 2009; Charbit & Michalun, 2009; Charbit, 2011). However, in the field

of tourism governance, and despite the fact that there is different literature

that discusses the respective benefits of centralization or decentralization in

decision-making in this field (Rondinelli et al., 1989, Tosun and Jenkins,

1996, Dredge and Jenkins, 2003, Yüksel et al., 2005, Pforr, 2006),

decentralization can be more efficient when regions suffer similar effects in

crisis situations such as those produced by COVID-19. This is due to the

synergies that can occur between the different regional or local tourist

destinations or to the multiplier effects likely to be generated by the

combination of these decentralized policies (Candela et al., 2015).

Government support generally targets tourist and hospitality products

or destinations and should be focused on promotional campaigns for the

different tourist brands in three specific ways: (a) capturing markets that are

close and accessible to the early stimulus measures adopted; (b) providing

consumer confidence with new protocols in all operational areas of tourism;

and, (c) promoting safe and renewed destinations.

 7

Figure 1. Theoretical and Conceptual Framework

Republic Act No. 7394, also

Expectancy Theory  known as the Consumer Act

of the Philippines (Article 2.)
An individual will behave or act
in a specific way because It is the policy of the State to
they’re motivated by a desirable
protect the interests of the
result.
consumer, promote his general
(Kahneman, 2019)
welfare and to establish
---------------
standards of conduct for
business and industry.

Customer Loyalty Theory Republic Act No. 10962 Gift

Check Act of 2017 Sec 8
…what drives loyalty in
S
customers and can represent Applicability to promotional
an effective tool for gaining and programs, warranties, return
retaining your hard-won policies, and senior citizens'
patrons. and persons with disabilities
discounts.
(Kahneman, 2019)

Level of Awareness and Persuasion of

Hotel and Resort’s Guests on Loyalty
Programs in Panglao, Bohol

Level of Level of
Awareness Persuasion

Action Plan
 8

It is amidst this unprecedented moment of change that more hotel

executives are taking a fresh look at one of the most popular, but also

misunderstood, aspects of the hospitality business: loyalty programs. On one

hand, loyalty programs have never been more popular. Consider the results of

a 2019 study conducted by YouGov, which found that 64 percent of

consumers in the U.S. were already members of at least one loyalty program.

On the other hand, travelers don’t appear to be engaging with loyalty

programs in ways that create meaningful long term relationships with hotel

brands. Consider the findings of another recent loyalty insights study, which

reported in 2019 that of 14.8 million memberships, only 6.7 million were

active.

Today, hotel customers no longer want to experience only genuine

services from providers; they want more, as customers seek better deals,

demand amenities, write reviews, and share what they get from hotels. The

loyalty program, often called a rewards program or frequent-guest program, is

the core of this phenomenon (Raab et al., 2016; Xie et al., 2015). Customers

have fought to receive exclusive benefits by joining loyalty programs and

developing their tiers to elite levels. When accomplishing elite levels,

customers can not only receive noteworthy benefits such as late check-out,

free Wi-Fi, discounts for rooms and restaurants, free access to the executive

floor lounge, and a free room upgrade, but also utilize the accumulated points

for an upcoming stay, transferring points to preferred mileages, or buying gifts

(Hewitt, 2017).

As hotel firms have difficulties in providing differentiated services and

increasing switching costs to customers (Reinartz & Kumar, 2000), most

 9

hotels make the best use of loyalty programs to attract such customers

(Berezan et al., 2017; Melnyk & Bijmolt, 2015; Tanford, Raab, & Kim, 2011).

In return, hotel firms can expect increased customer satisfaction and loyalty

through the loyalty program, which positively impacts long-term financial

performance and the relationship between customers and brands (Anderson

et al., 1994; Berezan et al., 2017; Bolton et al., 2000; Hutchinson et al., 2015;

Reichheld & Sasser, 1990). According to the J.D. Power 2017 Hotel Loyalty

Program Satisfaction Study, Marriott International’s loyalty program, Marriott

Rewards, ranked highest in overall customer satisfaction with a loyalty

program, and Marriott International achieved a total of 22.89 billion USD in

revenue in 2017, which is the highest revenue among major hotel groups

(U.S. Securities and Exchange Commission, 2018). These examples show

that hotels can be guided to success in their business by attracting customers

and increasing revenues through their loyalty program (Effler, 2017).

The loyalty program is an essential tool for chain hotels to foster

customer loyalty by providing a combination of hard benefits generating an

elimination of direct financial costs (e.g., complimentary stay) and soft benefits

reflecting customers’ sense of special status (e.g., late check-out) to

customers who frequently make purchases (Yi & Jeon, 2003). The loyalty

program enables hotels to retain a number of customers who possess a high

level of repeat-purchase loyalty.

Building relationships is beneficial to business, and creating programs

that reward customers is just one of many ways to foster long-term loyalty.

Loyalty programs are important in hotels because they are an effective

strategy for deepening customer relationships. Retaining customers is far less

 10

expensive than acquiring new ones. Furthermore, customer retention in

general resulted in a significant increase in profits. Loyalty programs take the

concept of customer retention a step further by establishing and rewarding

existing customers with a combination of points, discounts, or other rewards.

According to an article on Ezee Absolute (2021), hotel loyalty programs

are divided into three categories: partnership rewards, point system, and

personalized rewards. Partnership Rewards are a traditional method of

running loyalty programs. The operation of these partnership rewards

programs is straightforward. When guests reach the threshold you've set,

they'll be eligible for the benefits (Kiflo, 2021). Points System is a newly

developed system that is generally preferred by branded hotels. Every time a

guest makes a booking in any hotel of the same brand, they receive a specific

set of points in their profiles. When the points reach the minimum threshold,

guests can redeem them for free stays (H. Sallberg, 2010).

The foundation of this digitalized concept is guest profiling. The system

automatically enrolls guests in this loyalty program when they create their

profiles. It also aids in the comprehension of their behaviour, booking

patterns, and service expectations. Personalized Rewards are, in essence, an

upfront rewards policy. There are no predefined criteria for these rewards. It is

entirely dependent on the capacity of the hotel, whom to offer and what to

offer (Sallberg, 2010). Many hotels, for example, have a policy of providing

gifts upon check-out. Some hotels offer referral-based incentives to attract

guests. If the guests book the property through any of the references, the

referrer would be eligible for the rewards.

 11

K Abdul Gaffor (2012) defines awareness as "being aware of

something; cognizant, educated alertness." Awareness is the state or ability to

notice, feel, or be aware of events, objects, or sensory patterns. At this level

of consciousness, an observer can confirm sensory facts without necessarily

assuming understanding. Any knowledge requires consciousness, but

awareness alone does not constitute knowledge. It is the state or quality of

being aware of something in general.

According to Matt Heinz (2013), There’s an important difference

between awareness and interest that is often lost on marketers today, but is

vitally important to reaching & influencing prospects earlier in their buying

cycles. Awareness occurs when the prospect knows who you are. Interest

doesn’t happen until they care about what you do.

Awareness requires far less of the prospect, and the means by which

you can generate awareness are significantly wider. Awareness can be driven

by curating great content to your prospects that might have nothing to do with

what you do, but drives significant value-add for the prospect so that they

want to keep hearing from you. Awareness simply means building trust,

rapport and attention from the prospect so that they’re still paying attention

when they have a specific need. And if they know about you, who you are and

what you do, that awareness can be converted into interest far more

effectively, efficiently and at a higher conversion rate.

Persuasion, according to Alison Doyle (2020), is the process of

persuading others to change their minds, make a commitment, purchase a

product or service, or take a specific action. Persuasion skills, both verbal and
 12

written, are highly valued in business. Although persuasion is most commonly

associated with sales, it can also be useful in a variety of other fields.

Managers persuade employees to do unpleasant but necessary tasks,

lawyers argue in front of juries, IT companies persuade clients to invest in

better networking equipment, and department heads create presentations to

convince their bosses to increase their budgets.

According to Galičić & Laškarin (2011, 42), persuading guests to

become members of one or two of these programs can contribute towards a

significant increase in revenue. To achieve this, efforts should focus more

heavily on repeat guests and on making hotel loyalty programs even more

appealing to such guests.

“When a persuasive agent uses a credible tactic, persuasion

knowledge access can lead consumers to evaluate the agent and its offering

more (rather than less) favorably.” (Boerman, Willemsen & Van Der Aa,

2017). Consumers are also far more likely to form negative perceptions of

someone who tries too hard to persuade them to do something they do not

want to do. Negative perceptions of the sales agent reduced the agent's ability

to persuade and increased the target's resistance to the persuasion attempt in

sales situations. While some of these customers may still make the

recommended purchase, there are long-term consequences of these negative

perceptions, such as negative word of mouth and a lower likelihood of repeat

purchase.

According to (Kahneman, 2019), humans have two modes of decision-

making: The first makes snap decisions and acts on impulse and emotion.
 13

The second is more logical, measured, and takes a longer time to come to

conclusions.

This desire ties a lot into Expectancy Theory that states that an

individual will behave or act in a specific way because they’re motivated by a

desirable result. And the Customer Loyalty Theory that attempts to define

what drives loyalty in customers and can represent an effective tool for

gaining and retaining your hard-won patrons.

Those theories will come into play when encouraging customers to sign

up and invest in the hotels’ loyalty program. It makes customers want to

engage more if they know they’ll get something valuable in return.

Moreover, the study is anchored on Republic Act No. 7394, "The

Consumer Act of the Philippines," which states that it is the policy of the State

to protect the interests of the consumer, promote his general welfare, and to

establish standards of conduct for business and industry. And the Republic

Act No. 10962, "Gift Check Act of 2017", Section 8, states that applicability to

promotional programs, warranties, return policies, and senior citizens' and

persons with disabilities discounts—Promotional sales activities, loyalty

programs, warranties, return policies for cash purchases, and discounts for

senior citizens and persons with disabilities, as provided for by applicable

laws, rules, and regulations, shall apply equally to purchases of goods and

services made with gift checks. 

Consumer knowledge plays an important role in the choice of products

and services same as awareness that plays important role in recall and

recognition. Alamro and Rowley (2011) reported that the brand awareness is
 14

an antecedent of brand preference. They further classified the awareness

antecedent into two categories, the controllable and non-controllable

communication. They found that brand promise is very important to be

delivered to enhance the brand preference. Advertising is widespread and

commonly used by marketers to introduce, remind, recall and position their

products and services in consumers' mind. Aravindakshan & Naik (2011)

observed that when advertising is stopped the ad stay in the memory of the

customers for three weeks. Channel members are also important in the value

creation process by marketers.

Radder & Huang (2007) argued that in creating the awareness of a

brand of high involvement products, the role of advertising is more important

than low involvement products. Perception is a key factor of consumer attitude

and behavior. Rajagopal (2007) reported that it is very important what

consumer perceive about a brand, so the firms are required to focus and

spend on the effective communications to make their consumers aware about

unfamiliar brands and as a result consumer will be likely to make brand

buying decisions. The consumer makes a choice based on awareness than

Reputation when he/she is in a situation to decide a brand among the different

brands having the same reputation (Brewer & Zhao, 2010). Therefore, brand

awareness is positively associated with brand loyalty (Nguyen, Barret & Miller,

2011).

According to Friestad & Wright (1994), the questions the Persuasion

Knowledge Model (PKM) raises must be addressed by empirical studies using

a variety of methods, from traditional experimentation to phenomenological

inquiry. And according to the analysis of Ham et al. (2015), most empirical
 15

studies use an experimental or survey method and explicitly ask target

consumers’ ratings questions to measure subjective persuasion knowledge,

but very few researchers use a phenomenological approach. Such findings

point out gaps in our understanding of the model and opportunities for future

research. 

In an online survey conducted on 2018, South Korea was chosen to be

the respondent as the hotel industry there is rapidly developing over the past

few years and there has been a recent boom in staying at chain hotels from

domestic travellers for their not only business purpose but also pleasure time

(Kang, 2019). The survey company provided a small amount of incentive to

the participants who completed the survey successfully. The invitation email

included the following screening questions: Are you a member of any hotel

loyalty programs? Have you stayed in any chain hotel brands within the last

12 months? Additionally, the qualified participants were informed of the

definition of the hotel loyalty program and were given examples. The

questionnaire of each item was employed based on the studies previously

used. 22 items were used to measure perceived value of a loyalty program

(Xie & Chen, 2014); 4 items were adopted from Hennig -Thurau (2004) to

measure satisfaction with a loyalty program; 3 items were employed from

Fullerton (2005) to measure affective commitment; 7 items from Han et al.,

2011a,b to measure switching barriers; 3 items from Han & Ryu (2009) were

used to measure customer brand loyalty and slightly modified the items to

adequately fit in the hotel context.

According to the inventor of the net promoter score (NPS) Mr. Fred

Reichheld Increasing customer retention rates by 5% increase profits by 25%

 16

to 95%. These benefits are not just limited to FITs, but even the corporates

avail them. Many business travelers have their membership in certain hotels,

providing the properties with bulk business benefits. Since every hotel has a

separate customized loyalty program, they tend to opt-in for these hotels.

Most hotel corporations find that the return on assets invested in

getting existing guests to rebuy is greater than that of assets spent on

acquiring new guests. So, the result of a 5% increase will be a 25% to 45%

increase in profits (Kotler, Bowen & Makens 2010, 21).

According to research conducted by Paul Brown at McKinsey &

Company, the repeat guest segment generates revenue amounting to 40 - 50

billion dollars (Kotler, Bowen & Makens 2010, 21). These guests spend only a

part of their money in the hotels they prefer. This is the result of the growing

number of loyalty programs per individual guest.

Persuading guests to become members of one or two of these

programs can contribute towards a significant increase in revenue. To achieve

this, efforts should focus more heavily on repeat guests and on making hotel

loyalty programs even more appealing to such guests. The ability of a hotel to

retain guests depends upon the consistency with which it can deliver quality,

for example, by rewarding longstanding members with even better

conveniences and additional services. This entails categorizing guests into

segments and understanding guest behaviour in each segment. Differences

should be viewed based on individual persons, as well as on-demand,

considering that the structural analysis of demand heterogeneity is based on

 17

individual opinions, wishes, habits and financial means (Galičić & Laškarin

2011, 42).

The epidemic is expected to cast a serious and lasting impact on the

hospitality industry in the short term and in the next three to six months, and is

likely to recover in six months' time. Due to the suppression of customer

demand during the epidemic, the industry is expected to face a period of

concentrated demand release after the epidemic, based on experiences from

SARS in 2003. How to quickly and accurately capture the change in customer

demand, how to design a corresponding customer experience, how to turn

crisis into opportunity and how to seize the opportunity for development?

These have become the key challenges for hoteliers to ponder. Due to the

uncertainty of the changes in customer needs after the epidemic, hotels need

to review their existing service offerings so as to adapt to the changes in

customer experience (Bhattacharya, 2020).

 18

THE PROBLEM

Statement of the Problem

The purpose of this study is to determine whether the level of

awareness of the hotels’ loyalty program among Panglao, Bohol guests
affects its ability to persuade the guests to use and avail such programs. The
study’s findings serve as the foundation for the purpose intervention or action
plan of the researchers.

This study specifically seeks to answer the following questions:

1. What is the demographic profile of the respondents based on the

following?

1.1 age,

1.2 marital status,

1.3 monthly income, and;

1.4 employment status?

2. What is the level of awareness of hotel and resort’s loyalty programs in

Panglao, Bohol?

3. What is the level of effectiveness of the hotel and resort’s loyalty

program in terms of its ability to persuade the guests to use and avail
of such programs?

4. Is there a significant relationship between the level of awareness

among guests of the hotel and resort’s loyalty program and its level of
effectiveness in terms of its ability to persuade the guests to use and
avail such programs?

5. What action plan could be proposed based on the result of the study?
 19

Hypothesis

The study seeks to accept or reject the null hypothesis (Ho):

The level of effectiveness of hotel and resort’s loyalty programs in

terms of their ability to persuade is unaffected by and has no significant

relationship with the level of Awareness of the guests in Panglao, Bohol on

the hotel and resort’s loyalty programs.

Significance of the Study

The output of this study is beneficial to the following individuals and groups:

Hotel and Resorts. This study will guide the hotel companies in their

marketing strategy and will help them gain more guests.

Hotel and Resorts Management. This research will assist them in

implementing new techniques for increasing guest awareness and persuading

them to take a more active interest in the hotel's loyalty programs. This

research will also help them improve their performance in this competitive

industry.

Hotel and Resorts Marketing Staff. This study will assist them in

determining the more in-depth role of loyalty programs in the development of

the hotel's marketing department. This will also help them in identifying a

more efficient method of recognizing loyal guests that are not limited to a

single market and will encourage the use of efficient loyalty programs in the

hotel industry.
 20

Hotel and Resorts Personnel. They may be able to discover additional

strategies that will help them improve their interactions and engagement with

potential clients.

Clienteles. This study will assist them in better understanding how marketing,

specifically loyalty marketing, works in the hospitality industry, allowing them

to select the best loyalty programs.

Future Researchers. The study's findings will serve as a foundation for them

to conceptualize possible ideas for a more in-depth parallel analysis of hotel

loyalty program awareness and persuasion.

RESEARCH METHODOLOGY

Design

This study will use a survey research design that will employ the

descriptive method with the assistance of questionnaires developed by the

researchers. The data that will be collected will be analyzed and interpreted to

ascertain whether a significant relationship between the level of awareness of

the hotel and resort's loyalty programs among guests in Panglao, Bohol, and

its ability to persuade them to use and avail of such programs exist.

Environment and Participants

This study will be conducted on the five (5) selected hotel and resorts

in Panglao, Bohol, with the respondents to be drawn from the guests using a

Cochran Formula. The researchers will use a 385 sample size to collect

adequate data and valuable information. They will be distributed to residents

 21

of Panglao, Bohol, along with the validated modified questionnaires they

develop. For the pilot testing of questionnaires, it will be conducted in Dauis,

Panglao with a population of 30 pilot test respondents.

Instruments

This study will use a modified survey questionnaire as the primary

research instrument. This questionnaire will be divided into two sections: the

profile of the respondents and the proper survey. The appropriate survey

questionnaires will have two parts, which will be the criteria to determine the

level of Awareness of hotels' loyalty programs among the guests on the

selected hotel and resorts in Panglao, Bohol, and their level of effectiveness

in terms of their ability to persuade the guests to use and avail such

programs. The thirty-four (34) items used in the questionnaire are based on

previous studies. Twenty-two (22) articles (Ezee Absolute, 2021) will be used

to measure the level of awareness among the guests, and twelve (12) items in

which six (6) items (Hennig-Thurau, 2004) and the other six (6) items (Ham et

al., 2015), will be modified to measure the level of effectiveness of the hotel's

loyalty program in terms of its ability to persuade the guests on the selected

hotels in Panglao, Bohol. A closed-ended questionnaire will be used and will

include questions that will be answered using a rating scale and will be written

in simple terms so that respondents can easily understand and respond to

them.

Table 1
The Level of Respondents' Awareness
 22

Range Verbal Interpretation Descriptive Interpretation

5 Extremely Aware
4 Moderately Aware
3 Somewhat Aware
2 Slightly Aware
1 Not At All-Aware
Have a very high level of Awareness
Have a high-level awareness
Have a moderate level of
Awareness
Have a little level of Awareness
No awareness at all

Table 2
The Persuasion Level of the Respondents
Range Verbal Interpretation Descriptive Interpretation
5 Definitely Is at a very high level of being
persuaded
4 Very Probably Is it a high level of being persuaded
3 Probably Is at a moderate level of being
persuaded
2 Probably Not Is it a little level of being Persuaded
1 Definitely Not Not persuaded at all

Data Gathering

This study will be implemented in the first semester of the academic

year 2022–2023 and is limited to the possible guests of the selected hotels

and resorts in Panglao, Bohol. The scope of the study will be limited to

assessing the current level of Awareness of hotels and resort's loyalty

programs among the guests and their possible effects on the hotels and

resort's loyalty programs' ability to persuade guests into using and availing

such programs. Hence, this study will not dig deeper into the aspects of

awareness and persuasion of the respondents.

Assessing awareness and its ability to persuade guests into availing

the hotels and resort's loyalty programs will be vital in the sustainability of
 23

hotels in Panglao, Bohol, in this new normal. With this, it is necessary to

collect relevant data to further prove its significance in the hospitality industry.

The collected data shall include the demographic profiles of the respondents,

the level of awareness of the hotels and resort's loyalty programs, and the

level of effectiveness of the hotels and resort's loyalty program in terms of its

ability to persuade the guests of the selected hotel and resorts in Panglao

Bohol.

The following will be the activities that shall be undertaken in gathering

the data:

1. The researchers will draft a letter addressed to the Campus

Director, College Dean, and the management of the selected hotel

and resorts, requesting permission to conduct the study.

2. Once the researchers receive the permit to conduct the study, pilot

testing will be shown to test and validate the survey questions before the

actual survey deployment. Once questionnaires are validated, researchers will

plan a data collection schedule following government protocols in the new

normal and personally distribute the research instruments to the respondents.

Furthermore, to encourage respondents to answer the questionnaire honestly

and objectively, the researchers will assure them of the confidentiality of their

responses. Throughout the data collection period, the researchers will be

looking for the research respondents' full cooperation. The researchers will

tabulate the collected data after retrieving the research instruments. To arrive

at the scientific analysis and interpretation of the results, quantitative data

processing will be determined.

 24

Statistical Treatment

To determine the precise interpretation of the results, the data will be

tabulated and processed manually by the researcher with the assistance of a

computer.

The data collected in this study will be statistically treated as follows:

1. Percentage Formula

The following formula will be used to describe the demographic profile

of the respondents and the frequency of their answers to the listed items in

the questionnaire.

Formula:

P = F/N x 100

Where:

P = percentage

F= frequency of responses

N = total number of population

2. Weighted Mean

The following formula will be used to determine the level of awareness

and persuasion of hotels' loyalty programs among the guests in Panglao,

Bohol.

Formula:

WM= ∑ WM/X

Where:
 25

WM= weighted mean

w= weighted factor

∑= summation

N= total number of population

3. Spearman’s Rank

This is to determine the difference between the level of awareness and

persuasion of hotels' loyalty programs among the guests in Panglao, Bohol.

Formula:

6 ∑ d 2i
ρ=1−
n(n2 −1)

Where:

ρ = correlation coefficient

d i = difference between the two ranks of each observation

n = number of observations
 26

DEFINITION OF TERMS

The following terms will be used frequently throughout the study. For a

better understanding, these are operationally defined in the context of this

research.

Awareness. It refers to the awareness level of respondents on loyalty

programs among hotels in Panglao.

Loyalty Programs. It refers to providing additional benefits and special offers

to returning guests to a hotel.

Partnership Rewards. It refers to a loyalty reward where guests can receive

the benefits provided by a hotel's a partner/vendor once they reach the hotel's

standard.

Personalized Rewards. It refers to a loyalty reward with no criteria and

entirely depends on the hotel's capabilities.

Persuasion. It is the action of being persuaded to avail of the service or

purchase goods from a business or a hotel.

Point System. It refers to a specific set of points rewarded in the guest’s

profile every time a guest makes a booking in any hotel of the same brand.
 27

REFERENCE LIST

Abdul Gaffor (2012). Considerations in the Measurement of Awareness.

Retrieved from https://files.eric.ed.gov/fulltext/ED545374.pdf

Alison Doyle (2020). What is Persuasion.thebalancecareers.com/persuasive-

skills-with-examples-2059694. Updated on September 17, 2020.
Agenda. Journal of Hospitality Marketing & Management.
Retrieved from
https://www.tandfonline.com/doi/pdf/10.1080/1936862320201788231

Ahmed Alamro, Jennifer Rowley (2011). Antecedents of brand preference for

mobile telecommunications services.
https://www.emerald.com/insight/content/doi/10.1
108/10610421111166621/full/html.

Ann Brewer, Jingsong Zhao (2010). The impact of a pathway college on

reputation and brand awareness for its affiliated university in Sydney.
emerald.com/insight/content/doi/10.1108/09513541011013033/full/html

Ashwin Aravindakshan, Prasad Naik (2011). How does awareness evolve

when advertising stops? The role of memory
Retrieved from https://ideas.repec.org/a/kap/mktlet/v22y2011i3p315-
326.html

Atila Yuksel, Fisun Yuksel, Aydın Adnan Menderes, Yasin Bilim (2005).
Destination Attachment: Effects on Customer Satisfaction and
Cognitive, Affective and Conative Loyalty. Retrieved from
Xhttps://www.researchgate.net/publication/
223038372_Destination_Attachment_Effects_on_Customer_Satisfactio
n_and_Cognitive_Affective_and_Conative_Loyalty

Christopher M. Weible et al. (2020). COVID-19 and the Policy Sciences: Initial
Reactions and Perspectives.
Retrieved from https://link.springer.com/article/10.1007/s11077-020-
09381-4

Christof Pforr (2006). Tourism Policy in the Making: An Australian Network

Study. Annals of Tourism Research. Retrieved from
https://franciscodosanjos.files.wordpress.com/2011/01/pforr-2006

Claire Charbit, Maria Varinia Michalun (2009). Mind the Gaps: Managing
Mutual Dependence in Relations among Levels of Government.
Retrieved from https://www.oecd.org/gov/43832931.pdf

Daniel Kahneman, 2019). Design thinking, fast and slow: A framework for
Kahneman’s dual-system theory in design. Retrieved from
https://www.cambridge.org/core/services/aop-cambridgecore/content/
view/A200DC637BBDC982D288FC4F8A112DE7/
 28

S205347011900009Xa.pdf/design-thinking-fast-and-slow-a-framework-
for-kahnemans-dual-system-theory-in-design.pdf

Dan Louise Christian, Dacillo Ardemer (2020). COVID-19 Cataclysm: Impact

on the Philippine Hospitality and Tourism Industry. Retrieved from
https://www.researchgate.net/publication/
341764165_COVID19_Cataclysm_Impact_on_the_Philippine_Hospitali
ty_and_Tourism_Industry

Dianne Dredge, John Jenkins (2003). Destination Place Identity and Regional
Tourism Policy. Tourism Geographies. Retrieved from
https://www.tandfonline.com/doi/abs/10.1080/14616680320001297

Dogan Gursoy & Christina G. Chi (2020). Effects of COVID-19 pandemic on

Hospitality Industry: Review of the Current Situations and a Research

Fairmas (2020). What are the top hospitality trends in 2022?

Retrieved from https://fairmas.com/en/category/fairmas-blog/

Henrik Sällberg (2010). Customer Rewards Programs. Designing Incentives

for Repeated Purchase. Retrieved from
https://www.diva-portal.org/smash/get/diva2:835591/FULLTEXT01.pdf
Intention in Quick-Casual Restaurants: Moderating Role of Perceived
Price.

Jose Maria Barrero, Nicholas Bloom, Steven J. Davis (2020). COVID-19 Is

Also a Reallocation Shock https://www.nber.org/papers/w28731

John Bowen, Cristian Morosan (2018). Beware Hospitality Industry: The

Robots Are Coming. Worldwide Hospitality and Tourism Themes.
Retrieved from
https://www.emerald.com/insight/content/doi/10.1108/WHATT-07-
2018-00 5/full/html

Karen Xie, Chih-Chien Chen (2014). Hotel loyalty programs: How valuable is
valuable enough? Retrieved from
https://www.researchgate.net/publication/
277681759_Hotel_loyalty_programs_How_valuable_is_valuable_enou
gh

Kiflo (2022). 10 Partner Program KPIs You Need in 2022. Retrieved from
https://www.kiflo.com/blog/10-partner-program-kpis

Kisang Ryu, Heesup Han (2009). Influence of the Quality of Food, Service,
and Physical Environment on Customer Satisfaction and Behavioral
Retrieved from
https://www.researchgate.net/publication/247753493_Influence_of_the
_Quality_of_Food_Service_and_Physical_Environment_on_Customer_
Satisfaction_and_Behavioral_Intention_in_Quick
Casual_Restaurants_Moderating _Role_ of_Perceived_Price
 29

Laetitia Radder, Wei Huang. (2007). High-involvement and low-involvement

products: A comparison of brand awareness among students at a
South African university. Retrieved from
https://www.researchgate.net/publication/241709949_High-
involvement_and_low-
involvement_products_A_comparison_of_brand_awareness_among_st
udents_at_a_South_African_university.

Leonardo Candela, Donatella Castelli, Paolo Manghi, Alice Tani (2015). Data
Journals: A survey. Advances in Information Science. Retrieved from
https://asistdl.onlinelibrary.wiley.com/doi/abs/10.1002/asi.23358

Matt Heinz (2013). The Modern Marketer's Field Guide. Retrieved from
https://www.amazon.com/Modern-Marketers-Field-Guide-2013-09-
10/dp/B01FGLSXP6

Marian Friestad, Peter Wright (1994). The Persuasion Knowledge Model: How
People Cope with Persuasion Attempts. Retrieved from
https://academic.oup.com/jcr/article/21/1/1/1853712?login=true.

Marina Laškarin, Vlado Galičić (2011). Development of loyalty programmes in

the hotel industry. Retrieved from
https://www.researchgate.net/publication/
287697251_Development_of_loyalty_programmes_in_the_hotel_indus
try. Revised 29 July 2012. (p 42)

Nguyen Tho, Nigel Barrett, Kenneth Miler (2011). Brand loyalty in emerging
markets.researchgate.net/publication/
235322031_Brand_loyalty_in_emerging_markets.

Niestadt Maria (2020). COVID-19 and the Tourism Sector. Retrieved from
https://www.europarl.europa.eu/thinktank/en/document/
EPRS_ATA(2020)649368

Nuno Fernandes (2020). Economic Effects of Coronavirus Outbreak (COVID-

19) on the World Economy. IESE Business School Working Paper No.
WP-1240-E. Last revised: 27 Feb 2022. Retrieved from
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3557504#

Paul Aubrecht, Jan Essink, Mitja Kovac, Ann-Sophie Vandenberghe (2020).

Centralizedand Decentralized Responses to COVID-19 in Federal
Systems: US and EU Comparisons. Retrieved from
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3584182

Park et al. (2020). Contact Tracing during Coronavirus Disease Outbreak,

South Korea, 2020. Retrieved from
https://pubmed.ncbi.nlm.nih.gov/32673193/
 30

Philip Kotler, John Bowen, James Makens (2010). Hospitality Marketing: A

Retrospective Analysis (1960-2010) and Predictions (2010-2020).
Retrieved from
https://journals.sagepub.com/doi/abs/10.1177/1938965510376353. (p
21).

R. Krishnan, et. al. (2020). Assessment of Climate Change over the Indian
Region. A Report of the Ministry of Earth Sciences (MoES). Retrieved
from https://link.springer.com/book/10.1007/978-981-15-4327-2#book
header

Sophie C. Boerman, Lotte M. Willemsen, Eva P. Van Der (2017). Effects of

Sponsorship Disclosure on Persuasion Knowledge and Electronic
Word of Mouth in the Context of Facebook. Retrieved from
https://journals.sagepub.com/doi/abs/10.1016/j.intmar.2016.12.002

Sudip Bhattacharya (2020). “Pandemonium of the pandemic”: Impact of

COVID-19 in India, focus on mental health. Retrieved from
https://psycnet.apa.org/record/2020-57017-001

Warwick McKibbin, Roshen Fernando (2020). The Global Macroeconomic

Impacts of COVID-19: Seven Scenarios. Retrieved from
https://www.brookings.edu/wp-content/uploads/2020/03/20200302_CO
VID19.pdf

Youjae Yi, HoseongJeon (2003). Journal of Academy of Marketing Science.

Effects of Loyalty Programs on Value Perception, Program Loyalty, and
Brand Loyalty. Retrieved from
https://www.researchgate.net/publication/228787148_Effects_of_Loyalt
y_Program_on_Value_Perception_Program_Loyalty_and_Brand_Loyal
ty
 31

APPENDIX A

Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY
Main Campus

Letter to the College Dean

June 2022

ARLEN E. ESCABARTE, MATVE

Dean, College of Business and Arts Sciences
Bohol Island State University, Main Campus
Tagbilaran City

Dear Madame,

Greetings with goodwill!

We, the 3rd year students of Bachelor of Science in Hospitality Management,

will conduct a research study entitled “LEVEL OF AWARENESS AND
PERSUASION OF HOTEL’S LOYALTY PROGRAMS AMONG LOCAL
RESIDENTS IN PANGLAO, BOHOL."
In connection with this, we would like to ask permission from your office to
allow us to conduct this study outside the school campus premises with the
selected respondents in Panglao, Bohol. The participation of the following
respondents is highly needed for the fulfillment of the study.

We are hoping for your kind-hearted approval of this request.

Thank you, and more power!

Respectfully yours,

KLEO ANJIELO AYUNAN

Thesis Group Leader

Noted by:
ARVIN S. CABALLO, MBA, LPT
Thesis Adviser

Approved by:
ARLEN E. ESCABARTE, MATVE
Dean, College of Business and Arts Science
 32

APPENDIX B

Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY
Main Campus

Letter to the Campus Director

June 2022

NELSON M. PATEŇA, PH. D

Campus Director
Bohol Island State University, Main Campus
Tagbilaran City

Dear Sir,

Greetings with goodwill!

We, the 3rd year students of Bachelor of Science in Hospitality Management,

will conduct a research study entitled “LEVEL OF AWARENESS AND
PERSUASION OF HOTEL’S LOYALTY PROGRAMS AMONG LOCAL
RESIDENTS IN PANGLAO, BOHOL."
In connection with this, we would like to ask permission from your office to
allow us to conduct this study inside and outside the school campus premises
with the selected BS-Hospitality Management instructors, vendors, tourists,
and locals. The participation of the following respondents is highly needed for
the fulfillment of the study.

We are hoping for your kind-hearted approval of this request.

Thank you, and more power!

Respectfully yours,
KLEO ANJIELO AYUNAN
Thesis Group Leader

Noted by:
ARVIN S. CABALLO, MBA, LPT
Thesis Adviser
Recommending Approval:

ARLEN E. ESCABARTE, MATVE

Dean, College of Business and Arts Sciences

Approved by:
NELSON M. PATEŇA, PH. D
Campus Director
 33

APPENDIX C

Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY
Main Campus

QUESTIONNAIRE

To the Respondents:

The researchers are studying “Level of Awareness and Persuasion

of Hotel’s Loyalty Programs among Local Residents in Panglao, Bohol."

In this connection, the researchers would like to ask for your support and

cooperation in answering the questions.

Please answer the following questions sincerely. Rest assured that

your answer will be treated with confidentiality. Your cooperation is highly

appreciated.

Thank you very much for your support.

Respectfully yours,

The Researchers
 34

RESEARCH CONSENT FORM

Name of Researcher(s)
Kleo Anjielo Ayunan, Jey Arh Ocon, Jona Abisado
Title of the study
LEVEL OF AWARENESS AND PERSUASION OF HOTEL’S LOYALTY
PROGRAMS AMONG LOCAL RESIDENTS IN PANGLAO, BOHOL

Please read and complete this form carefully. If you are willing to
participate in this study, ring the appropriate responses and sign and
date the declaration at the end. Please ask if you do not understand
anything and would like more information.

 I have had the research satisfactorily explained to me in YES / NO

verbal and written form by the researcher.
 I understand that the research will involve: answering the YES / NO
survey questionnaires that will take 10-15 minutes.
 I understand that I may withdraw from this study at any time YES / NO
without having to explain. This will not affect my future care
or treatment.
 I understand that all information about me will be treated in YES / NO
strict confidence and that I will not be named in any written
work from this study.
 I understand that any of my answers from the YES / NO
questionnaires will be used solely for research purposes
and will be destroyed upon completion of your research.
 I understand that you will be discussing the progress of your YES / NO
research with others
…………………………………………….. at Bohol Island
State University.

I freely consent to participate in this research study and have been given a
copy of this form for my information.

Signature: …………………………………………………………………….
………….

Date:
………………………………………………………………………………………
 35

APPENDIX B
Questionnaire

Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY
Main Campus
C.P.G. Avenue, Tagbilaran City, Bohol 6300
Vision: A premiere S & T University for forming a world-class and virtuous human resource for sustainable development of Bohol and the country. Mission:
BISU is committed to providing quality higher education in the arts and sciences, as well as in the professional and technological fields, undertaking
research and development and extension services for the sustainable development of Bohol and the country.

LEVEL OF AWARENESS AND PERSUASION OF HOTEL’S LOYALTY

PROGRAMS AMONG LOCAL RESIDENTS IN PANGLAO, BOHOL

(SURVEY QUESTIONNAIRE)

Dear Respondents,

Thank you for agreeing to take part in this critical study. We want to ask for a little of your time
to answer this survey questionnaire; please answer it honestly. We highly appreciate your participation
and want to remind you that all your responses to this research will be anonymous. The researcher will
make every effort to preserve your confidentiality.
Thank you for your cooperation.

The
Researchers

I. RESPONDENT’S DEMOGRAPHIC PROFILE

Age: Employment
Status:
( ) 18-24 ( ) Employed Full-time
( ) 25-34 ( ) Self-employed
( ) 45-54 ( ) Employed Part-time
( ) 55-64 ( ) Unemployed
( ) 65 & above

Marital Status: Monthly Income:

( ) Single ( ) Less than P2,999
( ) Married ( ) P3,000-P5,999
( ) Separated ( ) P9,000-P11,999
( ) Widowed ( ) P12,000-P14,999
( ) P15,000 & above
 36

APPENDIX B
Questionnaire

Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY
Main Campus
C.P.G. Avenue, Tagbilaran City, Bohol 6300
Vision: A premiere S & T University for forming a world-class and virtuous human resource for sustainable development of Bohol and the country. Mission:
BISU is committed to providing quality higher education in the arts and sciences, as well as in the professional and technological fields, undertaking
research and development and extension services for the sustainable development of Bohol and the country.

II. LEVEL OF AWARENESS

Direction: Kindly put a check (✔) mark on the box that corresponds to
your answer. These answers to the level of your Awareness.
LEGEND:
Range Verbal Interpretation Descriptive Interpretation

5 Extremely Aware Very high level of Awareness

4 Moderately Aware High-level Awareness
3 Somewhat Aware Moderate level of Awareness
2 Slightly Aware Rare level of Awareness
1 Not At All-Aware Very rare level of Awareness

Are you aware of any of these loyalty programs and their benefits?
5 4 3 2 1
Points System
 Room Upgrades
 Cashback Redemption
 A Free Extra Night
 Early Check-In and Late Check-Out
 Free Room Service Discounted Stays
 Free Room Service and Continental
Breakfast
Personalized Rewards
 Free Bottle of Wine/Champagne On Arrival
 Complimentary Valet Parking
 Free Laundry Services
 Select In-Room Amenities
 A Guarantee That There Will Be No
Blackout Dates On Member Rates
 Unlimited Coffee Service For Group
Meetings
 Ability to Use Rewards in the Restaurant or
Bar
 Free Happy Hour
 Wine Tasting for Rewards Members
Partnership Rewards
 Airport Transfer
 Discounted Rates in the Nearby
Restaurant/Café
 Partnered Discounts to Local Attractions,
Museums, and Restaurants
 Discounted Massages at the Spa/ Free Spa
 37

APPENDIX B
Questionnaire

Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY
Main Campus
C.P.G. Avenue, Tagbilaran City, Bohol 6300
Vision: A premiere S & T University for forming a world-class and virtuous human resource for sustainable development of Bohol and the country. Mission:
BISU is committed to providing quality higher education in the arts and sciences, as well as in the professional and technological fields, undertaking
research and development and extension services for the sustainable development of Bohol and the country.

III. LEVEL OF PERSUASION

Direction: Kindly put a check (✔) mark on the box that corresponds to
your answer. These answers of the level of your persuasion.
LEGEND:
Range Verbal Interpretation Descriptive Interpretation

5 Definitely Very high level of Persuasion

4 Very Probably High-level Persuasion
3 Probably Moderate level of Persuasion
2 Probably Not Rare level of Persuasion
1 Definitely Not Very rare level of Persuasion
‘

5 4 3 2 1
After being aware of the loyalty programs
among hotels, does it:
Make you think that it is enough to persuade you
to take an interest in/those loyalty programs and
their benefits?
Make you think that it is enough to persuade you
to avail those loyalty programs and their benefits?
Persuade you to take an interest in one/of those
loyalty programs and their benefits?
Persuade you to avail one/of those loyalty
programs and their benefits?
Make you consider convincing your family,
relatives, or friends to take an interest in those
loyalty programs and their benefits?
Make you consider convincing your family,
relatives, or friends to avail those loyalty programs
and their benefits?
Persuade you on availing all or some of those
loyalty programs?
Make you achieve the rewards easily?
Provide reasonable rewards for what I spend?
Provide accumulated points that never expire?
Provide special promotions available only to
members?
Recognize a special treatment to members than
non-members?
Provide privileges offered to an elite level?