Mobile Banking Solutions and Profitability of Five-star Hotels in Nairobi City County, Kenya

The hotel industry remains a vital contributor to Kenya’s economy, with Nairobi City County hosting the highest number of five-star hotel establishments. Despite their prominence, these hotels experienced declining profitability between 2020 and 2024, prompting an investigation into the role of mobile banking solutions in enhancing financial performance. The study aimed to assess the effect of mobile banking solutions on the profitability of five-star hotels in Nairobi City County, Kenya. Anchored on Transaction Cost Theory, Innovation Diffusion Theory, and the Technology Acceptance Model, the study adopted a descriptive research design targeting 62 respondents from Finance, IT, and Customer Service departments across eleven five-star hotels. Data were collected through structured questionnaires and analyzed using SPSS version 25.0. Reliability was confirmed through a Cronbach Alpha threshold of 0.7, while multiple regression analysis examined the relationship between mobile banking and profitability. Findings revealed that mobile banking solutions (β = 1.333, p < 0.05) had a statistically significant and positive effect on hotel profitability. This indicates that efficient mobile banking systems enhance customer convenience, accelerate transactions, and reduce operational costs, thereby improving financial performance. The study concluded that adoption of mobile banking technologies is crucial for boosting profitability in the hospitality sector. It recommends that five-star hotels invest more in secure, user-friendly, and integrated mobile payment systems to support seamless financial transactions and customer satisfaction.