Effect Of Information Communication Technology On Financial Performance Of Hospitality Firms In Kenya

Abstract

Competition among the hospitality firms has intensified and the players in this industry are struggling to attract customers. As a result, they have been forced to initiate innovative ways of surviving. One of the strategies they have adopted is information technology. Investment in technology can help improve the performance of the hospitality industry. This study aimed to establish the effect of information communication technology on the financial performance of hospitality firms in Kenya. The specific focus was to establish the effect of e-marketing, etransactions platforms, customer relationship management systems and financial management systems on the financial performance of hospitality firms in Kenya. The study adopted the Technology Acceptance Model, Transaction Cost Theory and the Resource-Based Theory in providing a theoretical anchor to the study. An explanatory research design was adopted and the target population of the study was 79 hotels classified as level 4- and 5-star hotels in Kenya. A census was conducted on the 79 hotels. The target respondents were finance and Information Technology managers from the hotels. A questionnaire containing closed ended questions was adopted for this study. The quantitative data collected was analyzed through descriptive and inferential statistics. The study established that adoption of information communication technology, that is Financial Management Systems, E-Customer Relationship Management, E-transactions and E-marketing has a positive and significant effect on financial performance of level 4- and 5-star hotels in Kenya. This led to the recommendations that the management of hotels in Kenya, both level 4, 5 and others to aggressively invest in emarketing practices such as Facebook, Instagram, twitter, LinkedIn, mobile apps and websites if they intend to significantly improve their financial performance ; aggressively invest in adoption of e-transactions practices such as credit cards, debit cards, pay pal, mobile payment services and master cards in order to significantly boost their financial performance ; invest in adoption of e-customer relationship management practices such as online call centers to handle complains, social platforms to handle complains, online room bookings, online book confirmation in order to realize a significant improvement in their financial performance and also invest in adoption of financial management systems such as electronic forensic analysis, accounting packages to manage accounts, internal control systems so as to have a significant improvement in their financial performance.