The Moderating Role of Environmental Turbulence in the Relationship Between Cost Orientation and Performance of Star-Rated Hotels in Nairobi, Kenya
DOI:
https://doi.org/10.5281/zenodo.23498864Abstract
The hotel industry faces continual pressure to improve efficiency and service level while focusing on customer satisfaction in an environment of constantly changing demand, input prices, technology, regulation and competition. This paper reviews the effect of cost orientation on hotel performance in Nairobi, Kenya, and examines whether environmental turbulence affects this effect. The study applied a positivist approach, an explanatory quantitative design and a cross-sectional survey design of 41 three-, four- and five-star hotels in Nairobi, Kenya. A proportionate stratified sample of 240 questionnaires were used, with a response rate of 149 usable responses (62.1% response rate). The focus was on cost effectiveness related to control, usage of resources, and operational efficiency. Environmental turbulence related to perceived changes in the market, technological, competitive, economic, political, and regulatory effects on hotel performance. In the multivariate model, cost orientation was positively associated with hotel performance (B = 0.214, SE = 0.063, beta = 0.228, t = 3.397, p = 0.001). The interaction between cost orientation and environmental turbulence was significant (B = 0.091, beta= 0.162, t = 2.167, p = 0.032). The moderation model increased explained variance from R2 = 0.481 to R2 = 0.534. The study contributes to the field of strategic management and hospitality by viewing cost orientation as adaptive resource management rather than indiscriminate cost cutting. Managerially, the findings enable the flexibility of budgeting, the visibility of costs, scenario planning and the protection of service-related resources during periods of environmental change.
Keywords: Cost Orientation; Environmental Turbulence; Hotel Performance; Strategic Orientation; Star-Rated Hotels; Kenya
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Copyright (c) 2026 Peter Ngwae Nzioka, Prof. Margaret Oloko, Dr Patrick Kimaku
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