Capacity Management and Performance of Five- Star Hotels in Nairobi County; Kenya

Abstract

This study aimed to establish the influence of capacity management strategies on performance of five-star hotels in Nairobi County. The study also sought to evaluate the challenges experienced in incorporation of capacity management strategies and its impact on performance of five-star hotels. The study undertook a census of all 32 five-star hotels within Nairobi County; Kenya. The study involved a sample of 96 participants drawn from the strata management structures of the respective five- star hotels within the Nairobi County. Primary data were used which were collected through questionnaires from the top-level, middle line and lower level managers. The study used descriptive statistical tools and the regression model to analyze the collected data. The study found that various implementation of demand and supply strategies by five- star hotels was affected by several challenge among them information technology infrastructure, high costs of operations and seasonality based demand. The study also documented that ICT plays a key role in enhancing capacity management as well as the performance of fivestar hotels. The regression results found that price management showed a positive and significant relationship with performance while demand forecasting reflected positive and significant relationship with performance. Further, the results showed that the relationship between outsourcing and creating reservation systems and performance was positive and significant while there was a positive but insignificant relationship between the use of part-time employees and performance. Additionally, capacity sharing had a significant positive effect on performance whilst expansion ante had a positive and insignificant relationship with the performance of five-star hotels in Nairobi. The research concluded that price management, demand forecasting, outsourcing and creating reservation systems and capacity sharing had a statistically significant and positive effect on performance of five- star hotels in Nairobi County.