The relationship between customer relationship management (CRM) and performance in the hotel industry

The aim of the study was to establish the levels of customer relationship management (CRM) practices among hotels in the City of Tshwane (COT), South Africa. It also aimed at establishing the relationship between the practice of CRM and performance. A cross sectional, quantitative approach was used in the study. A structured questionnaire was administered to all the 106 hotels in the COT municipality and 41 responses were received and used in the study. The practice of CRM among the hotels in the City of Tshwane was found to be high. A positive and significant correlation was found between CRM and performance. The study recommends that hotel management should continuously embark on various CRM practices in order to improve performance. Literature confirms that hotel competitiveness is dependent on the application of CRM. The results are based on a small sample of hotels, confined to a single municipality in South Africa, and the results may not be universally applicable to different localities. Future research could be extended to a wider population of South African hotels and comparative studies with other international destinations could also be done. No known studies to measure the practice of CRM had been done on local hotels. A hybrid performance construct, comprising of customer loyalty, sales turn over, market share and profitability was validated and used in the study. The study confirms that CRM leads to better performance.