Competitive Strategies Applied by Small and Medium Size Hotels in the Northern Coast of Kenya

Abstract

The objective of this study was to establish the competitive strategies used by small and medium hotels to cope with increased competition in the hotel industry. To achieve this objective a census survey was conducted, subsequently the shareholders and the managers of the small and medium scale hotels were used to complete a questionnaire. 30 out of the targeted 43 respondent completed and returned the questionnaire representing 70% response rate. It was found that 80% of the surveyed small and medium hotels in the Northern coast of Kenya have been in operation for less than five years, 56.7% of them are owned by sole proprietor and 63.3% has bed capacity of less than 40. It was also found that the most four adopted product and service competitive strategies are as follows: convenience of location of hotel, physical accessibility of the hotel, ability to offer customer different facilities and sending messages to customers. The least three challenges are use of technology, offering refreshment to customers as they check in, advertising of the hotel. While for personnel strategies indicates that the three most adopted competitive strategies are as follows: uniformed staff, well groomed staff and ability to handle customer complains. The least three challenges are; carrying out surveys to find out employee needs, hotel facilitate employee development, carrying out training on areas of relevance. For cost leadership strategies the results indicate that the three most adopted competitive strategies are as follows: commissions given to loyal customer or agent, cash discount to loyal customers, quantity discount to customers who come in bulk. The least challenges are: using professionals to train their staffs, travelling to get ideas on how to enhance their business, reduction of cost.