Effect of Corporate Social Responsibility on Financial Performance of Star-Rated Hotels in Uasin Gishu County, Kenya

Abstract

Despite the hotel industry playing a vital role in supporting the economy, it has like other business enterprises faced internal and external forces that threatened its competitiveness and sustainability. The purpose of this study was to establish the effect of corporate social responsibility on the financial performance of star-rated hotels in Uasin Gishu County, Kenya. The primary research question that guided the study was: What impact does corporate social responsibility have on the financial performance of star-rated hotels in Uasin Gishu County? The Freeman Stakeholder Theory served as the study’s main framework. The study applied a descriptive survey design. The study’s population of interest comprised 116 respondents who work for star-rated hotels in Uasin Gishu County. The sample size formula for this study was based on Yamane’s formula, where a sample size of 89 respondents was selected by use of stratified random sampling techniques. The primary techniques for gathering data for the study were a questionnaire and document analysis. To determine the reliability of each questionnaire segment, the researcher employed Cronbach’s alpha coefficient and expert judgment to test the content validity of each section. The data gathered was analysed using descriptive methods. The study findings indicated that corporate social responsibility had a strong influence on the financial performance of star-rated hotels in Uasin Gishu County, as the respondents agreed that CSR impacted hotel financial performance. Environmental improvement had the highest score of influence. As a result, the study recommends that hotels engage in more corporate social responsibility activities than they currently do, as this has been determined to result in a positive strategic positioning that is long-lasting. This study brings to the awareness that strategic reconfiguration and alignment of corporate social responsibility practices to organisation policies are key and thus are recommended in enhancing brand awareness