Management Science

Assessment of the role of reverse logistics on supply chain optimization: a case of plastic manufacturing firms in Kisumu County, Kenya

2025-01-01T00:00:00Z

Assessment of the role of reverse logistics on supply chain optimization: a case of plastic manufacturing firms in Kisumu County, Kenya KAMANDA, Emmah Kweng’e The plastic industry in Kenya is currently facing a pivotal moment, contending with numerous challenges that hinder its sustainability and operational effectiveness. Plastic firms in Kisumu face inefficiencies in supply chain optimization, with order fulfillment below 70% versus 90% globally, delivery delays of 7–14 days versus 2–3 days, and customer satisfaction at 64% versus 85% in emerging economies such as Vietnam. Weak reverse logistics disrupt inputs, underscoring the need for recovery, recycling, and remanufacturing solutions. A significant issue is the widespread absence of a structured approach to managing plastic products at the end of their life cycle, worsening environmental issues and wasting valuable economic prospects. In this light, the implementation of reverse logistics is identified as a crucial strategic requirement. Reverse logistics, which involves the movement of goods from their final destination for value recovery or appropriate disposal, presents an effective solution to various challenges faced by the sector. As environmental pollution and resource depletion have become growing concerns, manufacturing companies have recognized that recovering used products is an eco-friendly approach to promoting sustainable development. However, many businesses struggle with the challenge of integrating product recovery processes into their existing forward logistics systems. Supply chain optimization is a critical concern for businesses seeking to maximize efficiency, minimize costs, and deliver value to customers. As global markets continue to evolve, companies are constantly seeking innovative methods to streamline their supply chain processes and gain a competitive advantage. The improper disposal and management of plastic waste not only pollute the environment but also disrupt the supply chain of plastic products, affecting various stakeholders from manufacturers to consumers. These inefficiencies disrupt plastic recovery, reuse, and recycling, undermining both environmental sustainability and supply chain efficiency. The general objective of this study was to evaluate the effect of reverse logistics on supply chain optimization within plastic manufacturing industry in Kisumu County. The study was guided by three specific objectives: to assess the effect of plastic waste collection, plastic waste product recovery and recycling as well as plastic waste remanufacturing on supply chain optimization. The study was anchored on Triple Bottom Line Theory and Stakeholder Theory. The study utilized correlational research design and based positivist research philosophy. The study population consisted of 120 employees of the two plastic manufacturing companies in Kisumu County who were surveyed using census technique. Data analysis employed multiple regression, and results presented in tables and charts. The results collectively demonstrated that reverse logistics practices positively influence supply chain optimization in plastic manufacturing firms in Kisumu County. In particular, waste collection through source separation and automatic sorting technologies, recorded the highest explanatory power (R² = 0.502) followed by mechanical and chemical recycling (R² = 0.308) and lastly remanufacturing practices (R² = 0.134). The study concluded that improving reverse logistics activities enhances supply chain optimization. The study recommends that firms adopt advanced sorting and recycling technologies, establish partnerships with waste collectors, and integrate reverse logistics into supply chain planning to promote a circular economy and sustainable development. The study may help the plastic manufacturing sector discern the logistical bottlenecks that impede the recycling and disposal of plastic waste. The study’s findings would benefit not only plastic manufacturers but also policymakers, environmental management agencies, informal waste collectors, and the Kisumu County Government in designing effective waste recovery systems Master's Project

Perceptions of service outsourcing on organizational performance in manufacturing sector in Kenya: a case of Mayfair bakery Kisumu

2025-01-01T00:00:00Z

Perceptions of service outsourcing on organizational performance in manufacturing sector in Kenya: a case of Mayfair bakery Kisumu AKINYI, Eunice Sydede Since the 1990s, outsourcing has been a topic of discussion and has drawn interest from corporate entities worldwide. The advent of globalization has led to a widespread adoption of outsourcing by corporate entities, mostly due to its advantages, which include cost reduction, technology access, and business expansion. While some companies have benefited greatly from outsourcing, others have not capitalized on the arrangement in its entirety. This variation demonstrates that outsourcing certain services contributes more to the performance of the organization than others. However, little is known about the perspective of outsourcing and the extent to which it affects organizational performance. Additionally, the Kenyan food industry's perception of outsourcing has not been well examined. The purpose of the study was to investigate the perceived effect of service outsourcing on organizational performance in production sector in Kenya. Specifically, the study sought to establish the effect of outsourcing security services on organizational performance, determine the influence of outsourcing cleaning services on organizational performance and finally establish the role of outsourcing logistics services in enhancing organizational performance within Mayfair Bakery Limited. The study was guided by Transaction Cost Economic Theory and Resource Based View Theory. The study adopted a descriptive research design. The study population was 300 employees drawn from different departments of Mayfair bakery limited. The study sample of 75 employees was obtained using Yamane (1967) simplified formula for calculating samples. A pilot study was conducted with 10 participants from a different company with similar characteristics to test reliability and validity of the research instruments. Data were majorly collected using unstructured questionnaires. Purposive and simple random sampling procedures were employed to obtain the respondents. Content analysis was used to analyze qualitative data. The study reveals that logistics services outsourcing increased the profitability of Mayfair bakery. This was achieved through the reduction in logistic costs and improvement in supply chain management. In addition, the company was able to share some risks with the vendors thus reducing the level of transportation risks. Cleaning services outsourcing led to improved hygiene of the bakery. The improved hygiene attracted many customers into the business increasing sales. Cleaning service outsourcing also reduced the cost incurred for cleaning which has a positive impact on the profitability of the business. The cost reduction associated with building internal competencies increased the profitability of the bakery. The study showed that outsourcing security services reduced the cost of hiring in-house security. The cost associated with training and supervision was eliminated. Based on the findings of the study, the study concludes that service outsourcing in Mayfair bakery positively impacted on its performance. Service outsourcing increased its profitability, efficiency, effectiveness and its flexibility which reduced cost and improved the supply chain. The study recommends that other manufacturing firms should adopt these practices. This study will fill knowledge gaps and help supply chain managers develop guidelines and make decisions on service outsourcing. Additionally, it will also benefit government, academic, and supply chain stakeholders. Master's Project

Effect of partnership sourcing on the performance of supply chain management in Busia county government, Kenya

2024-01-01T00:00:00Z

Effect of partnership sourcing on the performance of supply chain management in Busia county government, Kenya BARASA, Stephen Ojanji Partnership sourcing implies a radical change in the way people work, joint decision making and collaborative activities. The operation of the supply chain management in Busia County Government is not performing optimally hence hindering services delivery. The general objective of the study was to evaluate the effect of partnership sourcing on the performance of supply chain management in Busia County Government, Kenya. The specificobjectives were to examine effect of knowledge sharing, shared goals and collaborative sourcing on performance of supply chain management in Busia County Government. This study was anchored on strategic network theory and supported by network, innovation hub, system and resource based theories that gave perspectives of the study. The study used correlation research design. The 350 respondents were the study's target population of which78 was selected using stratified sampling.35 respondents were used for pilot testing. The study used questionnaires to gather data and quantitative technique was used to analyze the data collected. The validity and reliability of the study was achieved by conducting pilot test on content validity. Tables summarizing the data using correlation statistics like percentages, means, and standarddeviations were used to display the results. The study findings show that the research relates the participants' perceptions on effective knowledge sharing within the Busia County Government are largely favorable. Also, it was found that shared goals benefit both improved cash flow and new technology, which performs averagely. Finally, the study findings show that collaborative sourcing in the supply chain process has benefited economies of scale. The study concludes that that shared goals, collaborative sourcing and effective knowledge sharing are essential tools in the performance of the supply chain department. Shared goals will enable the procurement department to focus on the main agenda. Effective knowledge sharing makes information more affordable. Lastly, collaborative sourcing gives the supply chain department an easy time when it comes to acquiring resources needed. The study recommends the significance of shared goals in ensuring the smooth functioning of thedepartment. With the collaboration of various departments, skills and resources can be effectively utilized. Finally, the study, recommends that it’s advisable for Busia County to adopt collaborative sourcing so as the supply chain department can be able to achieve its objectives. The study proposes for further study on effect of single sourcing on the performance of supply chain management. This study will be significant to County Government of Busia and other stakeholders if adopted it will combat corruption and reduce delays in supplies. Master's Project

An analysis of effect of unethical practices on supply chain Performance among county governments in Kenya, a case of County Government of Kisumu

2023-01-01T00:00:00Z

An analysis of effect of unethical practices on supply chain Performance among county governments in Kenya, a case of County Government of Kisumu OSAKA, Kevin Oduka All government agencies have fallen victim to procurement irregularities at some point. The Auditor General's report for Kisumu County for the fiscal years 2018-2019 and 2019-2020 details improper contract awards, payments for products and services that were never given, and irregular expenditure. In contrast, the purpose of this study was to conduct an analysis of the effect of unethical practices on supply chain performance among county governments in Kenya a case of Kisumu County Government. Specifically, the study looked at the effects of uncompetitive procurement processes, irregular expenditure and inadequate contract management on supply chain performance within the county government of Kisumu. The study was guided by null hypothesis as follows; uncompetitive procurement process has no significant effect on supply chain performance, irregular expenditure has no significant effect on supply chain performance and inadequate contract management has no significant effect on supply chain performance. The study was anchored on the fraud triangle theory, the differential association theory and the theory of ethics. The research relied on correlational research design. The target population for the study was 70, because of the small number, all of them were selected using census survey to participate in the final study. From a pool of seventy respondents to a census survey, 70 were chosen at random. Primary data collected using structured questionnaire was used in data analysis. Seven county administrators from Siaya took part in the pilot study. The data collection tool was checked with the manager and subject matter experts. Validity of the instrument was confirmed through expert’s review. Cronbach alpha was used to ascertain reliability establishing a coefficient of 0.96 for all the variable confirming reliability at a suggested threshold of 0.7. Using multiple regression, it was established that uncompetitive procurement practices have a positive significant effect on the Supply chain Performance of County Government of Kisumu. This implies that uncompetitive practices have enhance the performance of the County Government of Kisumu County. The study also established that irregular expenditure have a minimal positive insignificant effect on the Supply Chain Performance of County Government of Kisumu. This implies that irregular expenditure impact positive on the Supply Chain Performance of County Government of Kisumu although minimally. Anti-competitive procurement practices have a detrimental effect on supply chain efficiency, as will be shown below. The study recommends objective engagement of uncompetitive processes circumstantially, strict adherence to the procurement plan and therefore avoiding irregular expenditure, proper contract management of procurement contracts to enhance supply chain performance of the County Government. Master's Project

An analysis of the effect of supplier relationship management Practices on procurement performance among counties in Kenya. A case of Kakamega county government

2023-01-01T00:00:00Z

An analysis of the effect of supplier relationship management Practices on procurement performance among counties in Kenya. A case of Kakamega county government SAISI, Anne Signs of poorly managed supplier relationships include late delivery, subpar goods, duplicated raw materials, and repeated legal threats from suppliers owing to unpaid invoices. The firm risks losing both its most valuable suppliers and its most dedicated consumers if the aforementioned supply chain issues are not resolved. Therefore, the Kakamega county administration has taken some heat for the way it has handled ties with its suppliers. The high cost of goods and services provided, poor workmanships in various projects, and the stalling or incompleteness of other projects are just some of the issues highlighted in the audit report on the performance of the county government of Kakamega for the financial years 2016/17, 2017/18, 2018/19, and 2019/20. Despite these challenges, there has not been research on the same. Therefore the general objective of this study was to establish the effect of supplier relationship management on procurement performance in Kakamega County Government. Specific objectives of the study were: To determine the effect of supplier collaboration on procurement performance; to examine the effect of supplier commitment on procurement performance, and to determine the effect of supplier communication on procurement performance in Kakamega County Government. This study was also guided by the following hypotheses: H01: Supplier collaboration has no significant effect on procurement performance in Kakamega County Government; H02: Supplier commitment has no significant effect on procurement performance in Kakamega County Government; and H03: Supplier communication has no significant effect on procurement performance in Kakamega County Government. This study was therefore mainly guided by the transaction cost theory and also supported by theory of constraints, and social exchange theory.. The research design for this study was descriptive. The study population consisted of a Chief Officers, procurement officers and suppliers who were 80 in total. A census survey was therefore used on this total population. Primary data was collected via the use of questionnaires. The county government of Vihiga provided eight volunteers for the trial run. The supervisor and subject matter experts were contacted to establish the reliability of the data collection tool, yielding a rating of 0.89. The reliability of the instrument was calculated using the Cronbach alpha coefficient, and a result greater than 0.7 was obtained, indicating its dependability. Multiple regression analysis was used to examine the performance of Kakamega County Government's supplier relationship management and procurement, while means and standard deviations were used to characterize the organization's progress toward its objectives. Using multiple regression analysis, the study discovered no statistically significant connection between supplier collaboration and procurement performance. Supplier dedication strongly influences procurement performance, according to research conducted in Kakamega County, Kenya. A statistically significant correlation was also established between supplier communication and procurement success. Supplier commitment and supplier communication, but not supplier collaboration, were shown to affect procurement success in the Kakamega county administration. The research shows that a stronger focus on supplier commitment and supplier communication will help the county government of Kakamega improve its procurement performance. To reap the benefits of supplier relationship management, the county administration of Kakamega should be pushed to adopt the practice. The study was conducted with the expectation that researchers, policymakers, and practitioners would gain some insight from it. Master's Project

Effect of supplier evaluation on procurement performance of Public hospitals in Kisumu, Kenya

2023-01-01T00:00:00Z

Effect of supplier evaluation on procurement performance of Public hospitals in Kisumu, Kenya OTIENO, Osborn Okoi Supplier Evaluation is key to the overall service delivery in an organization more so in the service industries where quality and timely service delivery is considered critical. Many of the procurement functions in the hospitals are mandated to ensure quality and timely deliveries of hospital pharmaceuticals and non- pharmaceuticals items. Public Hospitals are facing numerous challenges ranging from stockouts, capacity challenges both technical and financial from suppliers, long lead times, and poor workmanship descending their performance as evidenced by the 2020 PPOA report which recommended Supplier Evaluation as a solution to these challenges. This problem is however persistent in abate empirical application of supplier evaluation implementation and research studies. It is with this regard that this study purposed to establish the effect of supplier evaluation on the procurement performance of Public hospitals in Kisumu, Kenya. Specifically, this study sought to determine the effect of supplier consistency, supplier competence, and supplier production capacity on the procurement performance of Public Hospitals in Kisumu, Kenya. The study was anchored on Agile Supply Chain Theory and Supply Chain Management Theory. A correlational research design was adopted to carry out the study. The study target population was 63 drawn from JOOTRH, Kisumu County and Lumumba Hospitals which were selected using census survey as the sampling technique. Primary data collected using structured questionnaires will be used through the drop-and-pick method. A pilot study was conducted at Ahero County hospital on 11 employees. Content validity was ascertained through expert review, the recommendations of the experts were incorporated in the data tool. Cronbach’s alpha was used to gauge internal reliability where a coefficient of 0.971 was established this being above the allowable threshold of 0.7. The study established the following through multiple regression analysis. A general beta constant of 2.055 and a p=0.011. This implies that a unit increase in supplier evaluation all other factors held constant, would lead to a corresponding change of 2.055 in the procurement performance of the public hospitals in Kisumu at 95% confidence level. On the effect of supplier consistency on the procurement performance of Public hospitals in Kisumu, Kenya the study established (β = 0.213, p= 0.199 >0.05) this implies that a unit changes in supplier consistency would lead to unit change(increase) in the procurement performance by 0.213 units, this though is not statistically significant at α = 0.05. On the effect of supplier competency on the procurement performance of Public hospitals in Kisumu, Kenya the study established (β = 1.136, p = 0.000<0.05) this implies that a unit changes in supplier competence would lead to unit change(increase) in the procurement performance by 1.136 units, this being statistically significant at α = 0.05. On the effect of Supplier production capacity on the procurement performance of Public hospitals in Kisumu, Kenya the study established (β = - 0.293, p = 0.075>0.05, this implies that a unit changes in supplier capacity of production would lead to unit change(decrease) in the procurement performance by -0.293 units, this not being statistically significant at α = 0.05. The study therefore recommends the inclusion of supplier competency metrics into supplier evaluation criteria and exclusion of supplier consistency and supplier production capacity from it. Master's Project

Effects of organizational characteristics on employee turnover among star-rated hotels in Nairobi County, Kenya

2023-01-01T00:00:00Z

Effects of organizational characteristics on employee turnover among star-rated hotels in Nairobi County, Kenya ONYANGO, Beatrice Employee turnover continues to be a challenge in the hospitality industry, with many hotels incurring significant investment costs in personnel recruitment and training only to lose them through exits. Nonetheless, employee turnover in the hospitality industry is high, with hotels in Nairobi, Kenya recording the highest turnover of over 72 percent against the optimal threshold of 30 percent as stipulated by Harris et al (2001). Although studies on the determinants of employee turnover exist, the results of these studies are inconclusive. Furthermore, despite the fact that organizational characteristics are a significant predictor of organizational outcomes such as employee turnover, there is a dearth of information on organizational characteristics such as managerial characteristics, organizational culture, and organization structure and how they affect employee turnover. As a result, this study investigated the effect of organizational characteristics on employee turnover in Nairobi County's star-rated hotels. The study sought to determine the effect of managerial characteristics on employee turnover, as well as the effect of organizational culture on employee turnover and the effect of organizational structure on employee turnover among Nairobi County's star-rated hotels. Based on Contingency theory, this study used a quantitative research approach with a correlational design to analyze data collected via self-administered questionnaires. The study sample consisted of 212 top and middle level managers drawn from a population of 486 using a multi-stage sampling method. Multiple regression analysis in SPSS was used to test the ensuing null research hypotheses. Findings showed that managerial characteristics, organizational culture and organizational structure had a combined significant effect on employee turnover (F [3, 178] = 195.249, p < .001, R2 = .767), explaining for 76.7% of the variance in employee turnover. Managerial characteristics (β = .205, t = 2.643, p = .009) and organization culture (β = .767, t = 8.660, p < .001) were found to be significant predictors of employee turnover. Organizational structure (β = .035, t = .373, p = .710) was however found not to be a significant predictor of employee turnover. The positive effect of managerial characteristics in overall and organization culture on employee turnover imply that hoteliers should pay attention to these two organization characteristics in efforts to tame the rising employee turnover among star-rated hotels in Nairobi County. The study findings add to the existing body of knowledge by specifically linking the three organization characteristic components to employee turnover in the hospitality industry. Master's Thesis

Relationship between product design, lean manufacturing and operational performance of Sugar firms in Kenya

2023-01-01T00:00:00Z

Relationship between product design, lean manufacturing and operational performance of Sugar firms in Kenya KUNYORIA, Ogora Joseph The Sugar Firms in Kenya contribute approximately 26% directly to the Gross Domestic Product (GDP) and an additional 25% indirectly through agro-based and associated industries linkages. However, they have experienced a significant decline of milled sugar production from 523,652 metric tones in 2010 to 440,935 metric tones in 2019 according to in the sugar sub-sector report by Kenya Association of Manufacturers in 2020. This decline was mainly attributed to the high cost of production stemming from inefficiencies across the value chain from inadequate research and extension leading to the design of production systems that are inefficient. Despite the vast contribution of the sugar firms to the economy, this problem of inefficient production system has not been solved and thus the Sugar Firms performance continues to spiral downward leading to the dissolution of some firms, downscaling of operations. The reviewed studies revealed an absence of a clear association among the three variables. They also indicating a weak relationship between product design and operational performance, underscoring the necessity for introducing a lean manufacturing as a moderator to enhance understanding and potentially strengthen the intricate interplay between product design and operational performance. Product design, lean manufacturing, and operational performance practically exist together, since lean manufacturing boosts product design by eliminating waste and consequently elevates operational performance, on the contrary, based on the reviewed studies, there has been an absence of research endeavors aimed at establishing the association of this three variables. It is in this regard that this study purposes to establish the relationship between product design, lean manufacturing, and operational performance of Sugar Firms in Kenya. Specifically this study seeks to determine the effect of product design on operational performance of Sugar Firms in Kenya, to establish the effect of lean manufacturing practices on operational performance of Sugar Firms in Kenya, and to establish the moderating effect of lean manufacturing practices on the relationship between product design and operational performance of Sugar Firms in Kenya. The research was guided by the resource-based view theory and transaction cost theory. This study was guided by a correlational research design. A census survey was conducted targeting all 164 managers and assistant managers of Sugar Firms in Kenya. A pilot study was conducted of 14 participants constituting of managers and assistant managers of seven departments in Transmara Sugar Company to test for reliability using Cronbach‘s alpha, with a threshold of 0.70, indicating satisfactory instrument reliability. The Cronbach's Alpha reliability coefficient obtained in this study was 0.849. Primary data was collected using questionnaires. The study was based on three fundamental ways of assessing the validity of the research instrument which include; criterion, content, and construct. A multiple linear regression model was applied to establish the association among explanatory variables in this study. The results established that product design significantly affects operational performance (β =0.742, p=.000), hence, adoption of product design yields a significant 0.742 unit increase in operational performance for Sugar Firms. Indicating a positive and significant association between the two variables. Lean Manufacturing had a significant positive effect on operational performance (β=0.661, p=0.000), suggesting that the implementation of lean manufacturing practices leads to 0.661 unit increase in operational performance. After incorporating the interaction effect, the R square change was 0.008 (p=0.048), indicating that lean manufacturing statistically moderates the relationship between product design and operational performance by 0.8%. It was concluded that supply chain management played a more prominent role in determining product design compared to digital technologies which had the lowest prevalence in that regard. Consequently, it was concluded that lean manufacturing is a crucial and influential factor in shaping the operational performance of Sugar Firms in Kenya. Finally the study concludes that lean manufacturing plays a significantly moderates relationship between product design and operational performance, providing valuable insights for enhancing these aspects within the manufacturing context of Sugar Firms. Thus, the study recommends that Sugar Firms' Management should focus on maintaining a robust product design while integrating lean manufacturing practices to enhance operational performance. By adopting the provided lean manufacturing model, they can effectively strengthen the relationship between product design and operational performance. This approach is likely to lead to improved overall performance and efficiency in the sugar firms' manufacturing processes. The study may have a significant impact: to the government by aiding in the formulation of policies, to the sugar sub-sector by aiding them to focus on a robust manufacturing system with a paradigm shift from loss marking to profit-making institutions and a hub for the creation of employment and the world of academia may contribute to the increasing body of literature on operations management activities. PhD Thesis

Effect of business proximity to infrastructure on the relationship between informal hospitality services and socioeconomic well-being of women entrepreneurs in selected counties in Kenya

2023-01-01T00:00:00Z

Effect of business proximity to infrastructure on the relationship between informal hospitality services and socioeconomic well-being of women entrepreneurs in selected counties in Kenya AKINYI, Lynette Ogada Onyando Despite hospitality services being considered an income diversification, the extent to which it improves women’s socioeconomic well-being is not explicit. Therefore, this study sought to investigate the effect of hospitality services on the socioeconomic well-being of women entrepreneurs in Kenya. Specifically, the study sought to describe the types of hospitality services offered by women entrepreneurs in selected Counties in Kenya; to determine the effect of the provision of outside catering, events management and housekeeping services on the socioeconomic well-being of women entrepreneurs in selected Counties in Kenya and to establish the moderating effects of proximity to infrastructure on the relationship between provision of outside catering, events management and housekeeping services and socioeconomic well-being of women entrepreneurs. The study was pinned on the following theories; The Opportunity Based Entrepreneurship Theory, Feminist Theory and Integrated Development Framework. The study adopted a mixed methods approach and sequential exploratory research design. The study population was 829 women entrepreneurs from four selected Counties namely Muranga, Kisumu, Kakamega and Nakuru. Purposive sampling was used to select 8 discussants for interviews and 8 FGD participants in the qualitative phase. Self-administered questionnaires were distributed to 265 randomly selected participants in the quantitative phase. Qualitative data was analyzed using framework analysis. Quantitative data was analyzed using the regression analysis technique. The study established that women entrepreneurs offered outside catering and event management services to improve their socioeconomic well-being. Regarding socioeconomic well-being, the qualitative study revealed that women attained increased income, improved health and access to education. This was confirmed by quantitative results where there was a significant relationship between outside catering and the socioeconomic well-being of women entrepreneurs (t = 2.731, p =.001). Similarly, events management services significantly influenced the socioeconomic well-being among the women entrepreneurs (t =4.708, p < .001). Proximity to infrastructure had a moderating effect on the relationship between outside catering, events management and housekeeping service and the socioeconomic well-being of the women entrepreneurs in the selected counties in Kenya (With changes in R2 of 0.081, 0.111 and 0.129 respectively). This will inform Tourism Regulatory Authority policy changes to address womenled hospitality services in Kenya in terms of strategies, and infrastructure development to make the sector more vibrant for the improvement of women's socioeconomic well-being. PhD Thesis

Effects of airbnb rental proliferations on revpar of star-rated hotels in Nairobi County

2023-01-01T00:00:00Z

Effects of airbnb rental proliferations on revpar of star-rated hotels in Nairobi County AKOTH, Joy Ajwang Airbnb is one of the disruptive technologies that have grown exponentially since its inception in 2008. It has raised concerns among hoteliers in the hospitality industry worldwide due to its perceived effect on hotel performance. Nairobi County has seen a surge in the number of Airbnb rentals over the years while at the same time a declining financial performance of star-rated hotels. As a result, there has been a proliferation of studies aimed at understanding the nature of these effects. However, most of these studies have been conducted mainly in the developed economies with reported contrasting results. On the same note, very limited studies have considered Airbnb listings and Airbnb price related factors such as price dispersion and price differentials effects on performance of hotels in Nairobi County, Kenya. This study therefore aimed to investigate the effects of Airbnb proliferations on RevPAR of star-rated hotels in Nairobi County. Specifically, the study set to determine the effect of Airbnb listings on RevPAR of star-rated hotels in Nairobi County; assess the effect of price differentials on RevPAR of star-rated hotels in Nairobi County; identify the effect of Airbnb price dispersion on RevPAR of star-rated hotels in Nairobi, County. The study was anchored on disruptive innovation theory and adopted a quantitative research approach. Correlational research design was used to collect and analyse pooled panel data relating to ADR, occupancy and listings from Airbnb and 54 star-rated hotels in Nairobi County. The study used monthly secondary data for the period between April 2012 to March 2023. Data was subjected to descriptive analysis in Excel and pooled regression analysis in STATA v 13. Descriptive analysis indicates that Airbnb in its initial stage may not be a concern to hoteliers but in the long run does affect the hotel performance. The regression analysis results indicate that Airbnb listings, price differentials and Airbnb price dispersions jointly accounted for 22.4% of the variation in RevPAR of star-rated hotels in Nairobi County (F [3, 127] = 10.34, p < .05, R2 = .224). The results indicate that a percentage increase in Airbnb listing, price differentials and Airbnb price dispersions would result to a decrease in RevPAR of star-rated hotels in Nairobi County by 0.017%, .13% and .12% respectively. This implies that with Airbnb rentals proliferation in Nairobi County, clients would prefer them to hotels as they charge lower rates and offer convenience. With lower rates, hoteliers would be forced to lower their room rates too and suffer low occupancy rate which in turn affects hotel RevPAR. The findings suggest that hoteliers should closely monitor Airbnb listings and prices and where possible also list some of their rooms on Airbnb. The findings add to the existing body of knowledge by providing insights on the disruptive nature of Airbnb to the hotel industry. Master's Thesis