Modern Economy, 2011, 2, 862-867
doi:10.4236/me.2011.25096 Published Online November 2011 (http://www.SciRP.org/journal/me)
Copyright © 2011 SciRes. ME
Specificities, Obstacles and Limits to Building Customer
Loyalty in Mountain Resort Luxury Hotels
ESSEC Business School Paris-Singapore, Cergy-Pontoise, France
Received March 30, 2011; revised May 6, 2011; accepted June 21, 2011
Customer loyalty in mountain resort luxury hotels is truly challenging; it presents specificities, obstacles and
limits. We shall base our findings on the example of Courchevel, located in the Savoie region, in France, a
resort renowned worldwide for its concentration of luxury and 5-star hotels with their star-winning chefs that
testify to this. One rarely mentions customer loyalty there and the concept remains intuitive and empirical; it
would require finer analyses, genuine competences and a better adapted communication. We shall in turn
study the limits brought to the following aspects: profitability, staff loyalty, new technologies, promotion and
communication, the evolution of the expectations of rich customers, of the gilded youth, gastronomy, inno-
vation in services, the successive waves of foreigners… in a post-recession context in which the codes of
luxury have evolved. Fifty or so qualitative interviews on the topic of customer loyalty were carried out in
twenty or so hotels for this study between 2008 and 2010.
Keywords: Luxury Mountain Resorts, Customer Loyalty
No one today disputes the importance of building cus-
tomer loyalty, whether in the hospitality business or oth-
erwise; there are significant stakes at play since it is of-
ten understood and proven that it costs twice as little to
keep the patronage of a customer rather than to win him
or her over… (Reichheld-Sasser, 1990; Thomas, 2001)
There are however very specific interesting situations
worthy of study than can be very educational, as well as
rarely mentioned cases in which customer loyalty can be
questioned. We shall observe such cases in this article.
Let us first study the particular situation of luxury ho-
tels in a world-renowned French ski resort located in the
Alps, namely Courchevel; it sets high standards in terms
of customer loyalty (50% on average) since up to four
successive generations often patronize the same hotels;
there are however many obstacles.
Among these obstacles, the recession rates high along-
side the evolution of customer behaviour, the increased
fast-changing consumer habits of younger generations,
an independent seasonal and top-of-the-range hospitality
sector which is harder-hit than other segments, a record
of successive waves of rich foreigners also affected by
their own history, a near absence of classical methods of
customer loyalty developed in chain hotels yet these ho-
tels experience nonetheless the same limits.
This is what we propose to broach here, both from the
customer and hotel manager perspective or from the
customer and staff perspective.
In order to do this, we have carried out fifty or so quali-
tative interviews in twenty 4-star and luxury 4-star hotels
(that landed a 5th star in 2010) as well as a single 3-star
hotel belonging to the Accor chain for the sake of com-
parison (21 therefore in total). These were completed by
the interviews of further players and decision makers
such as the successive mayors, the managers of ski lifts
(S3V), the ski instructors to wealthy regulars and both
foreign and French customers.
It turns out many hindrances paved the way to the suc-
cess of this venture: reluctance on the part of hotel man-
agers to broadcast their communication and customer-
loyalty strategies because of the competition, lack of
time linked to the seasonality, near impossibility to ac-
cess the highly protected customers of luxury hotels, cant
regarding the occupancy rate (85% on average) but
M. TIXIER 863
which is not supplied for each hotel, absence of reliable
statistical data on the scale of a given hotel etc…
Moreover certain hotels are too recent in terms of their
management to be interviewed on their customer-loyalty
programmes. Besides, even when isolating the sole chain
hotel of the resort (Le Mercure, Accor Group), one must
also distinguish among the independent hotels those
managed by the original families from those belonging to
financial holdings or to wealthy foreigners; the latter run
by managers rather than by owner families but these can
nonetheless remain very much part of the picture.
Abundant reading material is available on the subject
of customer loyalty. That concerning Courchevel is mainly
focused on the existing links between homogeneous so-
cial groups who enjoy mingling (Mc Alexander; Schou-
ten, & Koenig 2002; Muniz & O’Guinn 2001; Morais,
Kerstetter & Yarnal 2006) [3-5].
However, there is next to nothing regarding the draw-
backs linked to die-hard customer loyalty strategies, in-
deed even its adverse effects although these clearly came
to light in the course of the interviews. This is what we
shall be recounting here.
2.1. Pre- and Post-Recession
Until the 2007-2008 season, for which bookings had
been organised long ahead, the situation had been very
stable: customers booked from one year to the next, by
the week1, failing to question the period of their stay or
the choice of their hotel, and paid a deposit for this
One knew they would simply turn up. The 2008 reces-
sion emphasized the trends that spread to the whole tour-
ism sector: last minute bookings, shorter, less frequent
and divided-up stays, haggling or price decreases, re-
sulting in more random loyalty. Previously, hotel man-
agers were even in a position to select their customers.
Nowadays, they must renew them or develop customer
loyalty by engaging more effort in a high-end sector
which is struggling to take off again and an independent
hospitality business which is suffering2. Those customers
erstwhile won over are today more flighty.
2.2. The Disaffection and the Successive Waves
The major mountain resorts were more affected by the
recession when they were international because of the
defection of foreign markets, notably British, Belgian
and Dutch. The high-end hotel business was therefore
seriously harmed since it is highly sensitive to the flows
of foreign customers renowned for their high volatility.
Following the commercial canvassing, the wars3, the
scandals4 and the economic recessions, the waves of
wealthy foreigners have always succeeded one another in
a resort such as Courchevel.
Hence the Americans, followed by the Lebanese, the
Russians and the inhabitants of the Middle-East patron-
ized the resort, left, returned in some cases, which con-
stituted both a blessing and a risk for the resort. The An-
glo-Saxons seemingly belong to the most versatile seg-
ment; there are Turkish, Brazilian, Venezuelan, English,
Russian, Spanish… weeks. Those who set foot in the
resort for the first time may want to change hotels out of
curiosity before settling down, notably with the increase
in the luxury hotel offer (it has doubled over the last 10
years). Those successive waves of international custom-
ers compel hotel managers not to build customer loyalty
but rather to travel the world to lure new customers.
They canvas by going on promotional tours from July to
November, at a very high cost, to South America, Turkey,
Brazil, Israel, Mexico, Great Britain, Lebanon, Central
Women, who, according to studies (Backmann, 1988;
Petrick and Backman, 2001; Kerstetter, Bricker and Gitel-
son, 2000) [6-8] are both more loyal on an emotional
level and often make leisure-oriented decisions, consti-
tute a substantial population in terms of the development
of customer loyalty. All these cultures have besides very
different notions of luxury which are hard to combine in
a single setting.
2.3. Customers Have Changed
Tradition and Modernity: the subtle balance be-
tween tradition and modernity may no longer suit
the regular loyal customers; this may be noticeable
in catering, room refurbishment and all the services
on offer. Being constantly attentive is a true school
Satisfied fickle customer: one is too familiar with
his or her habits and tastes; he or she has explored
everything the hotel has to offer; he or she is keen
on novelty; one must reckon with his or her weari-
ness, forgive him or her for changing hotels since
he or she may be back and spread the word, there-
fore he or she must be turned into a loyal customer!
The zeitgeist: customers are today more openly
1At the Airelles, one could wait up to 8 years for a suite booked for two
weeks during the Xmas holiday season!
2The ProfPAR (Profit per available room) of 4-star hotels has declined
from 15% to 18% in 2009 according to the Protourisme Studies,
Deloitte and KPMG, 2009.
3For instance in Kuwait in 1992.
4For instance, Samsung, Prokhorov who later spurned the resort as did
those foreigners who were tired of being ripped off by certain shop-
keepers or restaurants.
Copyright © 2011 SciRes. ME
864 M. TIXIER
critical; they are no longer reluctant to give their
opinion on the quality of the service, on the cost of
a service and have become far fussier about the
quality-price ratio. They need to become involved
and vent their feelings
Intimacy and exclusivity: those are the new needs
of customers seeking a hotel offer that is both com-
plementary and different: privatized chalets, a home
away from home, luxurious serviced apartments…
the new competition offering more exclusive, inti-
mate, sophisticated packages has compelled tradi-
tional hotels to question their strategies in order to
confront the competition.
New luxury codes: the financial recession has trig-
gered a sustainable change in the consumer habits
of luxury hotel customers. The latter seek more au-
thenticity, less “blingbling”. Flaunting one’s wealth
and spending freely are deemed indecent; the page
of excess has been turned; elegant restraint is ap-
propriate; hotel managers are therefore striving for
the fine line between exclusivity and an overly os-
tentatious luxury, which is hard to pin down.
Hotel managers will be compelled to adapt their offer
to all those new behaviours in order to develop customer
loyalty among rich international would-be patrons.
2.4. The Evolution of Taste among the Gilded
This may constitute a setback to building customer
loyalty which led four successive generations of a single
family to patronize the same hotel from one year to the
next, season after season. Not only are these disloyal, but
their conception of luxury has changed tremendously.
Luxury has become more individual than social and the
symbolic dimension remains the unifying element. It is a
question of personal indulgence for the “sneaker-wearing
affluent” as they are known.
This new generation of 30-something enterprising
people contributes to breaking the traditional codes; they
disturb by their seemingly contradictory requirements
striving after a different kind of well-being. In their mind,
hotel managers will need to outshine each other in terms
of ingenuity, to propose increasingly luxurious, trendy
and intimist products. Those hotels in a position to offer
all of this are few and far between and new rival luxury
hotels are emerging on the market; historical luxury ho-
tels will therefore need to react, just like the Royal Mon-
ceau in 4 Paris5, which elected to rethink its structure and
its codes in order to carry on attracting customers and
Hence the image of luxury hotels will need an injec-
tion of new blood: renovation of the buildings, contem-
porary art, trendy bars intermingling customers, appeal-
ing to individuals from business, literary, political and
artistic circles6, wild and artistic parties upsetting the
hushed tradition of the legendary bars of luxurious hotels,
in a nutshell new-age revamped luxury embodying the
zeitgeist and the spirit of a place in a relaxed atmos-
2.5. Staff Loyalty
Although staff loyalty often goes hand in hand with cus-
tomer loyalty, one can note that in high-end hotels, staff
loyalty even prevails over customer loyalty. It reassures
customers from one stay to the next. The management of
seasonal employees raises nonetheless many issues in
It is indeed difficult to hire seasonal employees for the
duration of the four winter months.
Recruitment begins as early as July and the locals are
few and far between. Many stem from Brittany, Corsica,
the South-East of France or Paris. All must be fluent in
English. When they resign during the season, they cannot
be replaced. Hotel managers therefore make sure to hire
approximately 25% additional staff compared to their
needs at the start of the season.
Training, behaviour, accommodation issues often crop
up. Among them: learning to greet guests constitutes a
basic rule, de-escalating upsets likely to weaken the
waiting staff, and this unbeknownst to the customers.
Among frequent issues, one can list waiting staff imi-
tation: they adopt the behaviour of rich customers and
squander their monthly pay in a single evening. The sole
issue of waiters or waitresses living in substandard ac-
commodation may disrupt the whole team and up to the
customers. The loyalty rate varies between 50% and 60%
in the most renowned hotels8.
Besides, the outrageous tips left by very wealthy for-
eign customers may raise issues; these are disproportion-
ate to the wages and unbalance the relations with the
other local populations or holiday-goers.
The perception wealthy customers have of the service
has evolved with the new work legislation which has
modified the behaviour of seasonal staff, who are no
6In Courchevel, in the Strato, the Cheval Blanc, the Sivolière – In Paris
at the Ritz, at the Plaza Athénée.
7Like for instance in Courchevel at the Airelles and the Melezin where
notably the Russians have changed the atmosphere into something
850% corresponds to the average in the sector yet is exceptional in a
four-month only seasonal framework.
5In Paris, one can also list the future Mandarin Oriental, the Shangri-la
and the Peninsula. Study by the Jones Lang Lasalles Hôtels firm on
“The Parisian Luxury Hotels by 2015” by L. Barneville, Quotidien du
Tourisme, August 28 2008.
opyright © 2011 SciRes. ME
M. TIXIER 865
longer close to the customers. All the small details re-
volving around the tastes of regular customers which
made all the difference are no longer taken into account,
which pushes customers to declare they no longer enjoy
the service they were accustomed to. Yet the quality of
the service is more natural in rival resorts whether in
Switzerland or Austria, which impacts not only hotel
managers, but also the ski lift staff and the shopkeepers.
The ability for any staff member to provide high qual-
ity service implies appropriate training and the accep-
tance of his or her status as an “underling” i.e. someone
totally devoted to waiting on posh customers. This in
France does not go without saying. It raises the issue of
staff loyalty, which is far less risk-inducing for manage-
ment if the latter is aware how he or she will behave to-
wards customers. As a result management is compelled
to hire more members of staff than it actually requires in
order not to lose customers.
2.6. An Escalation through Innovation and
The permanent improvement process is nearly compul-
sory. Each wave of refurbishment sets new higher stan-
dards of service as famed interior decorators, designers
and star-winning chefs are enrolled, luxurious spas cre-
ated… To build customer loyalty, luxury hotels cannot
bypass a wellness centre and a cuisine on par with the
expectations of those customers and of the cutthroat
competition which is customary on this niche. A luxury
hotel must provide its guests with relaxation and leisure
opportunities, tools of seduction—a spa, a gourmet res-
taurant—to develop customer loyalty and increase the
duration of stays, win points in terms of occupancy, re-
new its customers notably in mountain resorts when
ageing customers do not always come to ski…
Each fall, hotels communicate to their customers by
mail all the improvements and changes on offer for the
following season: new chef, smoking room, pillow menu,
beauty treatments, made-over decoration, revamped inte-
rior design, play area, projection room, zany bar, stars
won for the hotel or the catering, improved connectivity,
improved quality of sound, furniture mobility, extreme
customization of services and better preserved inti-
The escalation may testify to a lot of innovation as it
may also surprise, seduce all over again, spark off one-
off experiences and thus differentiate from the competi-
tion in order to stand out .
When innovative factors are placed in relation with
contemporary academic literature (Flipo 2001, Jallat
1994, Martins and Terblanche 2003) [10-12] describing
the models of the culture of innovation, hotel managers
will need to contend with the fact that they will never
succeed in building alone loyalty among high-end cus-
tomers. Indeed, one does not develop customer loyalty
via innovation since it is systematically copied and must
hence be replaced by further innovation… quite a costly
Customer loyalty is entirely built on the ability to pro-
vide service. The possible service potential demanded
and always available requires customer awareness, com-
petence on the part of all the players of the system and
customer respect. The level of service is based both on
the availability of services on offer and on how compe-
tently they are provided. The constant exertion of pres-
sure following all potential requests requires qualifica-
tion and competence on the part of all employees, at all
levels. Meeting these expectations is the priority for any
luxury hotel and will have more or less impact according
to their discriminatory and differentiating character com-
pared to the competition.
2.7. Gourmet Excesses?
In the 2010 edition of the Michelin guide, four new res-
taurants were awarded stars in Courchevel. Boasting
seven star-rated restaurants, the resort now is one of the
spots in the world with the most star-awarded restaurants
per m2. This brings about two drawbacks: firstly, streng-
thening communication stances around luxury, which
tends to emphasize the sumptuous image of the resort,
which lies opposite the actual diversity of the offer and
repels ordinary customers; secondly, among rich cus-
tomers themselves who tire of an exclusive gourmet of-
fer in some hotels. Too much gastronomy might end in
gastronomy overkill and keep less rich yet similarly
sought-after customers at bay.
2.8. The Relationship between Loyalty and
It is not always as strong as hoped for. Indeed, according
to Werner Reinartz’s computations , the correlation
between the two averaged 0.20 to 0.45 on a scale of 1.00,
i.e. a low to moderate 6 level; loyal customers do not
cost the hotel less and do not spend more than the others;
they generate in fact little marginal income and are aware
of the best deals…Some hotel managers find them more
demanding and underline the necessity of connecting
loyalty and profitability by no longer investing on certain
customers who are no longer worthwhile . This is
quite easy for luxury and high-end hotels for which
qualitative observations can easily be kept and exploited
Copyright © 2011 SciRes. ME
866 M. TIXIER
on a case by case basis (i.e. “one to one”)9. This ap-
proach may help rethink the fixed cost structure in order
to adapt it to the evolution of the turnover according to
the season, lead to the reassessment of quality standards,
which is not usually consistent with the culture of the
2.9. A Limited Use of Technologies
Chain hotels invest in technology to increase customer
loyalty. This is seldom the case among luxury hotels in
Courchevel which are often independent and family-
owned. They will not consider inundating their custom-
ers with emails or marketing offers whereas they are
more attuned to protecting privacy and even less force-
fully collecting information by interrogating their cus-
tomers10. Internet-fuelled customer loyalty remains un-
der-developed or at the least not very visible; few means
are generally devoted to the web although new technolo-
gies contribute a new dimension and open numerous
perspectives for an increasingly customized marketing.
Besides, the sector resorts to other networks such as
Relais et Chateaux, Small Luxury Hotels
(SLH) or Leading Hotels of the World (LHW), world-
wide renowned labels, to compensate for the absence of
traditional customer loyalty schemes that are ill-suited as
well as loyalty strategies with a strong less commonplace
2.10. A Restrained Use of Communication
Communication with customers generally bypasses, as
we have pointed out, new technologies; these are also
limited by the seasonality of trade (four months per year).
As a result, customers remain for months on end with no
news from the hotel that could be developing their loy-
Sometimes the hotel managers, in a joint effort with
the Office du Tourisme, meet customers at home on the
occasion of a meeting in the framework of promotional
tours. These means to seduce and build customer loyalty
are very expensive and come in addition to the gifts the
customers receive upon departure to thank them for their
patron that season.
They are contacted once more over the summer to be
informed of the improvements to the services for the
upcoming season: major works, new spa, child area,
makeover etc… A new positive message to reassure and
make them dream.
But communication, even when it is more intensive,
would fail to sustainably build loyalty among educated,
demanding and world-wary customers… the requisite
reflection prior to a strategic communication is all too
often neglected, even ignored in luxury hotels.
Customer loyalty in luxury hotels in mountain resorts is a
challenge; it has its specificities, its obstacles and also its
limits. This study has enabled us to identify the short-
comings whose effects are even more acute in a post-
recession era with tougher competition. According to
many hotel managers, nowadays the luxury hotel offer is
too important for a resort such as Courchevel.
Oddly enough, hotel managers seldom mention cus-
tomer loyalty whose methods remain intuitive and em-
pirical. Few studies are available on the subject and each
hotel manager wants to jealously keep his or her custom-
ers without communicating figures… The cost of cus-
tomer loyalty is very high, as is canvassing other rich
customers. Genuine competences and finer-tuned analy-
ses on their part would most probably not spare them
from having to resort to the canvassing, yet further re-
search might contribute to it. The role of a better adapted
communication deserves to be looked into. It is likely
that on the short run, hotel managers themselves, in order
to build loyalty, will carry on making huge efforts by
travelling the world and by investing in the impeccable
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 S. J. Backman, “The Utility of Selected Personal and
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Professionals Interviewed (1 to 3 Times Each)
Bertrand Jean Jack, Baiada Clotilde, Blanc-Tailleur Gil-
bert, Bottelin Dominique, Bricaud Christophe, Clareton
Laurent, Debernard Henri, Dumont Nicolas, Durant Ter-
rasson Roland Claude, Durandard André, Faure Claude,
Gormier Christophe, Guimbaud Jerôme, Jacob Jean-
Pierre, Laverge Elizabeth, Mugnier Fernand, Mugnier
Philippe, Munier Thierry, Ojjeh Azziz, Pachod Noël,
Pachod Patrick, Parveaux Albert, Pelisson Gérard, Peti-
laire Séverine, Pinturault Claude, Rochedy Michel,
Rochedy Nicolas, Ruffier Jacky, Saxe Yvette, Tournier
Catherine, Tournier Eric, Tournier Nicolas, Toussaint
Josiane, Trauchessec Jacques, Vidoni Jean-Christophe,
Zanon Denis, Ziegler Michel.
Hotels Interviewed and/or Quoted
Les Airelles, L’Annapurna, Le Bateau Ivre, Le Carlina,
Le Chabichou, Le Cheval Blanc, Le Denali, Le Génépi,
Le Kilimandjaro, Le Lana, Le Manali, Le Melezin, Le
Mercure, Les Neiges, Le Paddock, Le Palace des Neiges,
La Pomme de Pin, Le Saint-Joseph, Le Saint-Roch, La
Saulire, La Sivolière, Le Tremplin.