An analysis of hotel rating and its implication on financial turnover of rated hotels in Kenya

Abstract

Hotel service quality has long been a concern for scholars and practitioners. Previous researches indicate that the service quality of hotels in Kenya is yet to match international standards. It has been argued that one reason why hotels do not deliver quality service is due to the substantial gap of the living standards of Kenyans and international tourists and the lack of proper investment in the sector due to fluctuations in growth in the past. With the recent growth in the economy, specifically the tourism sector, there has been renewed urgency by stakeholders to put local hospitality industry at par with other major tourism circuits or countries in the world. This may be attributed to the fact that tourism is identified as one of the key pillars for achieving Vision 2030. The main objective of this study was to examine the financial implications of rating of hotels. The study was conducted in tourism establishments in Nairobi and parts of Rift valley. The scope of the study focused on rated hotels in Kenya. The research design used a sociological survey targeting 50 hotel establishments. The researcher relied on primary and secondary data for information from which an analysis was conducted and conclusions generated. The primary data was collected through face-to-face interviews among tourists and hotel managers using a structured questionnaire. The quantitative data from the questionnaires was analysed using Statistical Package for the Social Sciences (SPSS) and Ms Excel, after which it was presented using graphs and pie charts to illustrate the findings for better understanding. The next step was interpretation which entailed generating recommendations and conclusions based on the results or findings on how the hotel rating impacted performance of hotel establishments. Findings from the study pointed out a strong relationship between hotel rating and hotel revenues. This was evidence that for hotels to increase earnings they also needed to improve their ratings. Further to this, rating of establishments eased the decision making of tourists since they would easily differentiate service level of hotels. Overall, it was evident that hotel rating was vital in the hotel business as it aided establishments effectively compete in the market place. Findings from the study will therefore offer an unobtrusive and economic way of examining hotel service quality. In addition, it will also help in understanding the quality service of the star rated hotels perceived by the domestic tourists and financial implication to hotel establishments.