Turnaround strategies and performance of three-star hotels in Kenya
Date
2022
Authors
Qiong, Liu
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The dynamism of the environment implies that organizations have to constantly redesign their strategies in order to remain competitive and survive since failure to do so leads to the closure of organizational operations. In the current Covid-19-ridden environment, the hotel industry faces the biggest brunt. This has resulted in many hotels closing down their branches or scaling down their operations which has led to dismal performance in the industry. This study sought to review how these hotels have applied turnaround strategies to influence their performance. Specifically, the paper examined how management restructuring strategies, staff rationalization strategies, asset restructuring strategies, and financial restructuring strategies impact the performance of the hotels. The research was premised on the resource-based view theory and the institutional theory. The study employed a positivism research philosophy in quantitatively examining the relationship between the variables. The research analyzed on the 63 Three Star Rated hotels in operation in Kenya. The study focused all the managing directors within the hotels using census sampling. A structured questionnaire was used in the data collection process, with 10% of the sample being used in testing the quality of the instrument in a pilot. After data collection, both descriptive and inferential approaches was used in the analysis of the data. The findings of the study were presented using charts and tables. The study was able to obtain responses from 54 star-rated hotels in Kenya which represented an 86% response rate. Research outcome showed that 43% of the employees had worked for 4-6 years, 33% were at the position for over 7 years with only 24% of the staff having retained their position for 1-3 years. The examination revealed that most of the hotels 39% for 12-15 years had a three-star rated hotels, 29% had the rating status for 8-11 years. According to the value of the regression output 63.1% of performance of three-star rated hotels could be explained by the independent variables (turnaround strategies). The study concludes that turnaround strategies have a significant positive effect on the performance of three star rated hotels in Kenya. Regarding the first objective, it was determined that managerial restructuring had an insignificant effect on the performance of the three-star rated hotels. The study came to the conclusion that providing opportunities for the continuous development of employees increases employee satisfaction and commitment to meeting and even exceeding organizational goals. The results pointing toward the conclusion that asset restructuring has significant positive effects on organizational outcomes. The study also recommends that hotels try to make the restructuring process more inclusive to ensure that all cadres of employees own the response strategies instituted by their organizations. The study recommends that the hotels team up with investment managers who will provide adequate advice on investment opportunities that can produce positive financial outcomes for the hotels.
Description
A Research project submitted in partial fulfillment of the requirements for a Master in Business Administration, Strathmore University