Moderating Effect of Competitive Intensity on the Relationship between Customer Orientation and Performance of Hotels in Kenya

Abstract

Customer orientation should permeate the overall activities of a firm in a competitive environment as it is considered to be an essential element for enhanced performance. The main objective of this study was to empirically test the moderating effect of competitive intensity on the relationship between customer orientation and performance of hotels in Kenya. Resource-Based View (RBV) theory grounded the study. The study employed explanatory research design and sampled 330 respondents from a target population of about 630 managers in 210 hotels, listed under Kenya Association of Hotelkeepers and Caterers (KAHC). Respondents were selected using cluster sampling combined with simple random. Primary data was collected using a structured questionnaire. Data was analyzed using Statistical Package for Social Sciences (SPSS 22.0). Stepwise regression was used to test the research hypotheses. The results revealed that customer orientation is directly associated with hotel performance and has a significant effect on the relationship. The study further revealed that competitive intensity has a moderating effect on the relationship between customer orientation and hotel performance. It therefore reasonable to conclude that customer orientation is an important determinant of performance. The study recommends that hotels must view customer relationship as an asset, consider customer retention as a priority and be committed to meeting customers’ needs and expectations. Such measures will offer hotels better understanding of customers in a competitive business environment which will eventually lead to enhanced performance.

Keywords: Customer Orientation, Competitive Intensity, Performance, Hotels, Kenya