Effect of Strategic Positioning on the Performance of the Hotel Industry in Nyamira County, Kenya

The hotel industry in Kenya has expanded rapidly since the onset of devolution, and this growth has intensified competition at a time when operational costs are rising and customer expectations are becoming more sophisticated. Hotels in Nyamira County have been struggling to make profits worth keeping them in business, and it has not been clear which strategic responses actually work in their environment. The purpose of this study was to establish the effect of strategic positioning on the performance of the hotel industry in Nyamira County, Kenya. The study was anchored on Porter's generic competitive strategies and supported by the Resource Based View, strategic behaviour theory and goal setting theory. A descriptive survey research design was adopted. The target population comprised 270 employees drawn from the 18 hotels operating in Nyamira County, consisting of managers, accountants, procurement officers, marketing officers, ICT officers and front office staff. A sample of 81 respondents, representing 30% of the target population, was selected through stratified random sampling. Primary data was collected using structured questionnaires administered through the drop-and-pick-later method, and the instrument was piloted to confirm its validity and reliability, with all constructs returning Cronbach's Alpha coefficients above the 0.70 threshold. Data was analyzed using descriptive and inferential statistics with the aid of SPSS. The study achieved a response rate of 97.5%. The descriptive findings showed that strategic positioning had been embraced to a large extent in the hotels, with a composite mean of 3.74; the respondents were aware of strategic product focus, continually improved their product offerings and tied differentiation to product superiority. Correlation analysis returned a strong positive and significant relationship between strategic positioning and hotel performance (r = 0.578, p < 0.01), while the regression results showed that strategic positioning explained 33.4% of the variation in hotel performance (R² = 0.334) and had a positive and statistically significant effect (β = 0.578, t = 6.215, p = 0.000). The study concluded that the presence of effective strategic positioning had a significantly positive influence on the performance of hotels in Nyamira County. The study recommends that hotel management should continue investing in strategic positioning, anchored on product focus, continuous improvement and differentiation, in order to retain existing customers, attract new ones and improve performance, while the government should enforce competition laws so that hotels compete on a level playing field.