Predictive role of innovation management in the performance of micro, small and medium hotels in Nairobi, Kenya

Abstract

This study looks at the predictive role of Innovation management (IM) in the performance of micro, small and medium hotels in Nairobi, Kenya. There is an increased recognition of the great role played by micro, small and medium enterprises (MSMEs) in the economic development of Kenya’s economy. They impact positively on GDP, employment creation, poverty reduction and industrial development. Despite this, MSMEs in Kenya face many challenges, which have led to most of them failing to get to their fifth year of startup. Hence very few graduate into large enterprises. Some of the reasons for this massive failure are training, market saturation, and resources. It is hypothesized in this study that successful and well-managed innovations can play a key role in resolving many of the challenges faced by MSMES. From the perspective of the hotel industry, innovation brings about better communication systems, products, processes and sources of supply hence improved firm performance. Despite this, few studies have been carried out in this area. The study adopted an exploratory research method. The target population of this study included all hotels in Kenya and focused on a list of 1003 MSME Nairobi hotels obtained from the ministry of tourism. The hotel datawas cleaned through systematic random samplingto obtain a total of 334 hotels.A sample formula was then used to obtain a sample size of 100 hotels. Data collection was done by means of interviews, which targeted hoteliers.One customer questionnaire was also attached to each of the sampled hotels. Data analysis was carried out using qualitative and quantitative analysis techniques and presented through frequency and distributive tables, percentages, means and standard deviations. From the results of the study, market and process innovation management were found to have played an important role on hotel performance, in contrast to these results, however, supplier innovation management was found to have played no positive role on hotel performance. Enterprise characteristics moderating role on innovation management variables and on hotel performance was also determined using hierarchical regression analysis. It was found from the results that legal status had a moderating role only on process innovation management and hotel performance. Hotel rating had a moderating role only on market innovation management and hotel performance. It was concluded from the results of the study that various challenges such as poor branding, lack of resources and skills, hindered the performanceof Nairobihotels. Recommendations to the said challenges were collaboration of the government of Kenyaand foreign owned hotels with the MSME hotelsto help themgrow.