Effect of strategic agility on the survival of star-rated hotels in Kenya
Date
2022
Authors
Cheruiyot, Mary Cheruto
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The Covid-19 pandemic has presented numerous challenges to various sectors of the global economies. One of the most hit sectors in the hotel industry which is facing new challenges such as reduced demand for hotel services, limited occupancy, business closures, and a sector-wide scale-down in operations. Locally, most hospitality industry firms have closed down or are facing a turbulent environment that has negatively impacted their financial outcomes and survival rates. This study assessed the influence of strategic agility factors on the survival of hotel businesses in the context of the current operating environment. The study focused on the influence of team empowerment, service diversification, operational flexibility and resource fluidity on the survival of hotels in Kenya. The research applied the crisis management theory and the resource dependency theory to anchor the review of the variables. The study used a positivism philosophy which help draw relationships between the variables and generalize the results to a larger population. Further, a descriptive research design was applied to estimate the relationship between strategic agility and hotel survival using quantitative methods and techniques. The population was 83 star-rated hotels operating within Nairobi City County. The study targeted the managing director, strategy or operations director. Census sampling was used in the determination of the sample size of 83 senior managers from the star-rated hotels. Structured questionnaires alluding to the study objectives was utilized in data collection from the respondents. Quantitative analysis techniques were adopted in the study. The findings were presented using charts and tables. Responses for the research were sought from 83 hotels and the survey was able to obtain 87% (n=72) responses. Results revealed that most of the responses were from 3-star hotels (76%, n = 55), 17% (n = 12) were 4-star hotels while only 4% (n = 3) were five-star hotels. The correlation tests showed a positive effect of team empowerment, resource fluidity, service diversification and operational flexibility on business survival of the star-rated hotels in Kenya. The summary of the regression statistic indicated that holding all other factors constant strategic agility will predict 40.2% of the changes in the business survival of the star rated hotels. The study findings led to the conclusion that the survival of star rated Hotels in Kenya are positively and significantly related to the team empowerment, service diversification, operational flexibility and resource fluidity. Separately, the research concluded that service diversification, operational flexibility and resource fluidity do have a significant positive effect on survival of star rated Hotels in Kenya. The research further concluded that team empowerment had a negative and insignificant effect on the survival of star rated Hotels in Kenya. Study recommends that the hotel business should leverage on their staff by offering professional training to equip employees with adequate technical skills and people relational skills to manage employee fluctuations more effectively. Further, research and development will lead to products and services prices being competitive than other competitors due to cost leadership advantage leading to overall hotel financial performance improvement The study also recommends channeling of necessary resources to the firm’s main services offering. For a firm to be assured of sustainability, it must identify its competitive advantage and apply all the necessary available resources to the same for maximum benefit.
Description
A Dissertation submitted in partial fulfilment of the requirements for the Award of the Degree of Master of Business Administration at Strathmore University