The Effect of Hotel Star Rating on Service Tipping Strategy and Performance of Hotels in Kenya.

Abstract

The main purpose of this study was to investigate the moderating effect of star rating on the relationship between service tipping and the performance of hotels in Kenya based on a Balanced Score Card Perspective. The study was based on the following theories; Resource-Based Theory and Balanced Scorecard Framework. First, the study adopted a descriptive quantitative survey design. The study, therefore, targeted the 183 starrated

hotels in the four circuits. Second, the study's unit of analysis included the hotel managers (general managers, supervisors and head of departments) and service staff. Third, the researcher adopted Yamane (1967) formula that can be used to calculate a suitable sample size of 117 hotel managers of the Star Rated Hotels operating in Kenya. Fourth, the study used a structured questionnaire to collect the required data from the respondents. The study established that when star rating was introduced as a moderating variable, the relationship between service tipping and hotels performance remained statistically significant, although the value of the regression coefficient reduced slightly (r=1.089-1.088 = 0.001). This slight change in the coefficient is the statistical proof that when star rating was introduced, it slightly reduced the regression coefficient, although the relationship between service tipping and hotels performance remained statistically significant. Finally, the study recommended that the Tourism Regulatory Authority, the policy body of Hotels in Kenya, develop a Service Tipping Policy to guide service operations in the star-rated hotels in Kenya. It also recommends that the department of Kenya Tourism regulatory (TRA) should promote service tipping among the star-rated hotels in Kenya.