Cost Reduction Strategies and Guest Satisfaction among Hotels in the Coast Region of Kenya

Abstract

Purpose: The increase in operations cost in Kenya has seen some hotels close while others lose guests. In addition, poor customer relationship management and the loss of accreditations issued early are thought to be a result of rising operating costs. The study sought to investigate the effects of cost-cutting strategies on guest satisfaction in hotels in the coast region, specifically Mombasa, Kilifi, and Kwale.
 Methodology: To collect and analyze data for this study, a quantitative approach using survey design and stratified random sampling were used. A total of 394 questionnaires were distributed to various respondents from various strata across the levels in hotels in Kenya's coast region. Descriptive statistics and regression analysis were used in SPSS version 21 to analyze the data and produce percentages and frequencies to describe the data as well as determine the impact of cost-cutting strategies on guest satisfaction.
 Findings: It was discovered that hotels in Kenya's coast region prioritized guest satisfaction and implemented a variety of strategies to improve and retain guest satisfaction. However, it was discovered that not all strategies contributed to increased guest satisfaction. The study discovered that water and energy conservation strategies had a positive effect on guest satisfaction in hotels in Kenya's coast region. Labor cost-cutting strategies, on the other hand, had a negative impact on hotel guest satisfaction. The relationship between labor cost cutting strategies and guest satisfaction is negative (r= - 0.116). There exist positive relationship between energy and water saving strategies and guest satisfaction (r= 0.09). From the model summary, it was established that variances in labor cost reduction strategies, energy and water conservation strategies accounted for 42.7% changes in guest satisfaction among hotels (R squared= 0.42).
 Contribution to theory and practice: The study's findings are important for policymakers because they can help develop policies in the hospitality industry that can help hotels improve and maintain guest satisfaction. In addition, hoteliers can learn about the impact of cost-cutting strategies on their customers from the study findings.