The Effect of Service Tipping on the Internal Process Performance of Hotels in Kenya: A Balanced Scorecard Perspective

This study aimed at determining the effect of service tipping on the internal processes performance of hotels in Kenya based on the Balanced Scorecard Perspective. A mixed-method approach was employed, combining descriptive survey and predictive correlational research designs, targeting 183 star-rated hotels in Kenya. Using Yamane’s (1967) sampling formula, a sample size of 126 hotels was selected from the Ministry of Tourism and Wildlife’s classification. Data collection was conducted over one month using structured questionnaires. A drop-and-pick method was applied, with some questionnaires also sent via mail to respondents. Descriptive statistics, including means, standard deviations, and percentages, were used alongside inferential statistics, particularly regression analysis. The findings revealed that service tipping had a positive effect on internal business process efficiency and learning and growth performance of Kenyan hotels. When star rating was introduced as a moderating variable, the relationship between service tipping and hotel performance remained statistically significant, although the regression coefficient slightly decreased (r = 1.089–1.088 = 0.001). Based on these findings, the study recommends that the Tourism Regulatory Authority, which oversees hotel policy in Kenya, develop a Service Tipping Policy to guide operations in star-rated hotels, thereby enhancing their performance, given the demonstrated positive impact of service tipping on Balanced Scorecard performance indicators.