Ownership concentration and performance of five-star hotels in Kenya

The hospitality industry is experiencing tremendous growth, leading to fierce competition among players. Good governance has the benefit of building a company's reputation and investor confidence, and ensuring accounting and reporting standards that attract capital inflows. The hospitality industry plays a critical role in a country’s economic development. In Kenya, even though the sector is the second largest foreign exchange earner the industry faces a myriad of challenges. This study sought to determine the effect of ownership concentration on performance pf five-star hotels in Kenya. The study was anchored on agency theory and adopted a descriptive research design. The unit of analysis was five-star rated hotels and hence the study targeted all the fifteen five-star hotels operating in Kenya, while the unit of observation was 198 head of departments, managers, and board members. The respondents were sought through a census. Structured questionnaires were the main tool to collect primary data from the targeted respondents. Cronbach’s alpha was used to test for the internal reliability of each variable used in the study. Data analysis was done using descriptive statistics, correlation, and regression analysis. The study used bivariate regression analysis to analyze the association between ownership concentration and performance of five-star hotel variables. The study findings indicated that ownership concentration had a positive and significant effect on the performance of five-star hotels. The study concluded that ownership concentration contributes significantly to performance of five-star hotels in Kenya. The study recommends that five-star hotels should put in place measures to safeguard accommodate government, foreign managerial and family ownership since these ownership concentration dimensions play a critical role on performance of the hotels. The study further recommends that the management can use the finding of this study to better align or revise the existing ownership concentration framework, to promote performance of the hotels.