Competitive Strategies and Market Share of Five-Star Hotels Operating in Nairobi County, Kenya

Abstract

Five star hotels in Kenya are competing with other hotels service providers limiting their aggregate market share. As a result, five star hotels are experiencing constrained market share that limits their profitability margin. It is thus against this argument that five star hotels develop competitive strategies that will allow them to expand and or maintain a sustainable market share. The general objective of the study was to establish the relationship between competitive strategies and market share of five-star hotels in Nairobi County, Kenya. The study employed both descriptive research design and explanatory research design. The target population of study was 10 five-star hotels in Nairobi City County. Data was collected using questionnaire. The data was analyzed using descriptive statistics, correlation, and regression analysis. According to a correlation analysis, cost leadership, differentiation initiatives, and cost focus all have a positive and significant link with market share. According to basic regression studies, cost leadership and five-star hotel market share are positively and strongly related. Differentiation approaches were also discovered to have a positive and significant relationship with the market share of five-star hotels. Furthermore, cost-consciousness and market share of five-star hotels are positively and significantly linked. Five-star hotels should investigate costing models that best suit their operations, such as activity-based costing or performance-based costing, in order to determine the most optimal cost strategy to implement in the long run in order to achieve the desired market share growth. According to the report, five-star hotels should provide unique products and services. Both the local and foreign markets should be served by the products and services. The study recommends that five star other than focusing on particular specific market niche, the five star hotels should be willing to expand to other market places including tourist destination places and other upcoming cities and towns in Kenya. In order to gain from focus strategy, the five star hotels should pay attention to the market segment which is sustainable so as to avoid the dangers encountered when pursuing focus strategy such as focusing on a segment that is too small or pursuing a segment that is declining.   Keywords: Competitive Strategies, Market Share, Five-Star Hotels, Nairobi County