EFFECT OF STRATEGIC APPROACHES ON THE PERFORMANCE OF STAR RATED HOTELS IN NAIROBI COUNTY, KENYA

Abstract

While the hospitality industry makes a great contribution to the economic development of a country, many hotels encounter organizational challenges associated with poor of strategic response approaches. Such strategies result in inability to meet changing customer expectations, huge losses and sometimes closure of business. It is on this basis that this study sought to investigate the effect of strategic approaches on the performance of star rated hotels in Nairobi County, Kenya. Specifically, the study sought to determine the effect of market segmentation strategy, effect of cost cutting and effect of technology adoption strategy on performance of star rated hotels in Nairobi County. The study also sought to assess the moderating effect of organizational policy on relationship between strategic approaches on performance of star rated hotels in Nairobi. The study was guided by market segmentation theory, lean management theory and technology acceptance theory. The target population of the study was 61 general managers of the 61 star rated hotels in Nairobi County. The study adopted census approach to incorporate all the 61 managers in the study. The study was quantitative in nature and adopted a correlational research design, structured questionnaire was used collect primary data and data was analyzed using a statistical package for social sciences where descriptive statistics; mean and standard deviation. Inferential statistics involved the use of Pearson’s Product Moment correlation and multiple regression models to determine the nature of the relationship between the variables. The study revealed that market segmentation strategy has no statistically significant effect on performance of star rated hotels in Nairobi County (r=0.458, p=0.01 and cost cutting strategy has no statistically significant effect on performance of star rated hotels in Nairobi County (r=0.924, p=0.000). Furthermore, the study revealed that technology adoption strategy has no statistically significant effect on performance of star rated hotels in Nairobi County (r=0.838, p=0.000). The study concluded that strategic response has insignificance effect on organizational policy. The study recommends that rated hotels adopt strategic response initiatives and suggest a comparative study to be conducted in the hotel industry in the East Africa Union. In addition, the study recommended that hotels should adopt current technology both in production and service delivery. This would help them address the diverse interest of customers on how Kenyan hotels perform in the region, especially post formation of the East Africa region.