Pricing Strategies and Operations Performance of Hotels in Western Kenya

Abstract

This study, therefore, investigates the impact of pricing strategies on hotel operational performance in Western Kenya during the Covid-19 pandemic. Hotels operations during this unforeseen and uncertain times were greatly affected and many were struggling to make ends meet. A census was done in Western Kenya region to further understand the relationship between the hotels pricing strategies, how their operational performance was affected and to what extent. The analysis showed that there was a strong correlation between pricing and hotel operational performance. Hotels that used dynamic and competitive pricing strategies were able to increase their total sales revenue by 52% by matching demand with supply and being creative in revenue generating activities that are not traditional. On the contrary discount pricing negatively impacted hotel operations performance by reducing sales revenue. The study advocates for dynamic pricing adoption but other non-pricing strategies need to be investigated for any correlation for other regions and to explain 48% of hotel operational performance.